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Welfare Reform on the Web (August 2007): Pensions - UK

Improved old age pensions 'will not cut number in poverty'

T. Helm

The Daily Telegraph, 19th July, 2007, p.11

This article reports the warnings issued by the Institute of Fiscal Studies (IFS) that the government's plan for a more generous state pension will not reduce the number of pensioners living in poverty. Twenty per cent of Britain's over 65s are defined as living in poverty. Without 'substantive reforms' that go beyond those proposed by the government, the IFS believes that this level will not decline but will simply remain stable.

Improvements to life expectancy cost the UK private sector 30bn over just two years

N. Drew

Pensions International, June 2007, p.4-6

Reports the findings of KPMG's study into the level of pension liabilities; as shown in the company accounts of 200 UK private sector companies. Liabilities have risen by 30bn over 2005 and 2006 due solely to companies increasing the assumed life expectancy of scheme members. FTSE100 companies added an estimated 25bn of liability, which is almost equivalent to their entire pension deficit as at 31 March 2007. This article also looks at measures of pension scheme funding and the basis of the life expectancy assumptions, with charts, and concludes with some thoughts about the future of UK private sector pensions and their relationship with staff retention.

Ministers oppose pensions assistance proposal

N. Timmins

Financial Times, 17th July, 2007, p.4

The government has resisted a proposal by Conservative and Liberal Democrat MPs to create a 'lifeboat fund' for 120,000 people who lost their occupational pensions when their employers went bust. The government can only guarantee 80 per cent of core benefits to those who lost their pensions before the Pension Protection Fund (PPF) was created. The government added that it cannot commit to a funding commitment when no money has been allocated for this purpose. However, it plans to increase the 80 per cent guarantee to closer to the 90 per cent provided by the PPF.

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