Labour Research, vol.95, Jan.2006, p.16-18
Article comments on the pension reform proposals of the Turner Commission from a trade union viewpoint. The Commission’s main proposal for a return to indexing the basic state pension to average earnings growth has been warmly received. The biggest problem unions have with the report is its argument that the retirement age will have to rise if changes to the state pension system are to be made affordable. However, raising the state pension age alone would not cover the cost of the reforms. Public expenditure on state pensions would have to rise from 6.2% of national income today to 8% by 2045. This is unlikely to be acceptable to the government, which is expected to shelve the report.
Pensions, vol.11, 2005, p.52-64
Paper lends support to the view that the UK suffers from an inadequate savings rate, both at the macroeconomic level in relation to maintaining a reasonable ratio of wealth to national income and at the individual level in relation to providing an adequate income in retirement. Boosting savings requires a mix of policies, including state pension reform to reduce reliance on means testing in the long term. Increased compulsory private savings is another option, but could have drawbacks if people on low incomes were forced to save more than was optimal for them. An alternative policy of automatic enrolment in occupational schemes unless employees actively choose to opt out may be more attractive, possibly backed up by a reform of tax incentives to target these more on employers and lower income groups whose behaviour may be more responsive to such incentives.
K. Rowlingson and S. McKay
Quality in Ageing, vol.6, Dec.2005, p.12-23
There is currently a major debate about the future of pension provision in Britain. Much of this debate concerns the level and sources of income. There is also growing interest in the role that assets and bequests might play in raising people’s living standards in later life. Based on a new survey of attitudes to inheritance and assets, article argues that assets will not fill the pensions gap for those on the lowest incomes. These groups are the least likely to have assets, and among those that do, there is more support for the concept of preserving assets for inheritance than among more affluent groups. However, among more affluent groups, some people are prepared to liquidate their assets in later life to supplement their incomes.
Journal of Social Policy, vol.35, 2006, p.77-96
Government aims to encourage (or compel) citizens to take more responsibility for saving for their retirement through private pension schemes.Private pension providers are expressing doubts about their ability to deliver products that will meet their customers’ expectations. Disgruntled and vociferous consumers of pensions products whose expectations have not been met can become a thorn in the government’s side.
Community Care, Jan.12th-18th 2006, p.30-31
Article comments on the Turner Commission’s proposals for pension reform. There is wide support for its proposals for a decent universal state pension linked to earnings and its rejection of the introduction of more means tested benefits for older people.The Commission has also argued that the retirement age should rise as longevity increases. However, this is felt to be unfair to the working classes, whose life expectancy is not as great as that of middle class people. Later retirement also requires a steady supply of job opportunities for older workers, which at present is not in place.
Pensions, vol.11, 2005, p.81-90
The Swedish compulsory funded defined contribution (FDC) scheme establishes an individual privately managed funded account for each saver. A public agency, the Premium Pensions Authority, runs the system. Each individual saver makes their investment choice from around 650 funds registered to operate in the Authority.Thus there is a direct relationship between the size of each individual saver’s fund at retirement, the return on the funds chosen by them and their lifetime earnings. The Swedish National Tax Authority collects contributions. An annual management charge applied to each saver’s account covers fund management costs and the operational cost of the Premium Pensions Authority. Article concludes that copying the Swedish system in its entirety would be a mistake for the UK. UK private pension administration is already an efficient business and creating a centralised, nationalised system is unnecessary. However, the private pensions industry in the UK needs to tackle the problems of high levels of account proliferation. When workers change jobs they are unlikely to transfer their retirement fund to their new employer. This means that savers accumulate several accounts over a working life. Adopting the Swedish idea of individual accounts into which different employers could direct contributions would end this tendency towards proliferation.