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Partnership in pensions: responses to the pensions Green Paper

Partnership in pensions: responses to the pensions Green Paper
Partnership in pensions: responses to the pensions Green Paper
The government's pensions Green Paper 'a new contract for welfare: partnership in pensions' proposes fundamental changes to the UK's retirement income system. Members of CASE and the Department of Social Policy at LSE have looked at the likely implications of the reforms for pensioner poverty, income security in old age, economic growth, the National Insurance system, tax reliefs, and women. Agulnik's analysis of redistributive effects of the State Second Pension (SSP) shows that it will result in much better benefits for low earners than would have been the case under SERPS. However, financing this improved provision through National Insurance contributions will mean that the burden of paying for the new scheme will be heaviest for those close to the upper earnings limit. Barr questions the macro-economic advantages of increasing the amount of funded pension provision via Stakeholder pensions. He finds there is no particular reason to favour the proposed balance of 60% private pension provision to 40% public provision over some other ratio. He also finds that Stakeholder pensions will not offer contributors complete income security in retirement due to uncertainties about investment returns, annuity rates and future inflation. Falkingham and Rake argue that the Government's proposals have failed to incorporate fully the needs of women. Women will be underrepresented amongst Stakeholder pensioners, and the exclusion of very low earners and carers with children over 5 from eligibility for the SSP will adversely affect women. Agulnik then looks at the proposed tax relief rules for Stakeholder pensions. While there are good reasons for the proposed £3,600 limit to tax relief on contributions, the retention of the existing rules for personal and occupational schemes is anomalous.
24
London School of Economics
Agulnik, Phil
718c8ca8-b97c-40a3-90bc-9d6e50c2c30b
Bar, Nicholas
481342c8-701b-441a-94be-122e718ed1b5
Falkingham, Jane
8df36615-1547-4a6d-ad55-aa9496e85519
Rake, Katherine
07c2f2f5-86e8-4982-85e0-82acb20a93c7
Agulnik, Phil
718c8ca8-b97c-40a3-90bc-9d6e50c2c30b
Bar, Nicholas
481342c8-701b-441a-94be-122e718ed1b5
Falkingham, Jane
8df36615-1547-4a6d-ad55-aa9496e85519
Rake, Katherine
07c2f2f5-86e8-4982-85e0-82acb20a93c7

(1999) Partnership in pensions: responses to the pensions Green Paper (CASE Papers, 24) London, UK. London School of Economics 67pp.

Record type: Monograph (Discussion Paper)

Abstract

The government's pensions Green Paper 'a new contract for welfare: partnership in pensions' proposes fundamental changes to the UK's retirement income system. Members of CASE and the Department of Social Policy at LSE have looked at the likely implications of the reforms for pensioner poverty, income security in old age, economic growth, the National Insurance system, tax reliefs, and women. Agulnik's analysis of redistributive effects of the State Second Pension (SSP) shows that it will result in much better benefits for low earners than would have been the case under SERPS. However, financing this improved provision through National Insurance contributions will mean that the burden of paying for the new scheme will be heaviest for those close to the upper earnings limit. Barr questions the macro-economic advantages of increasing the amount of funded pension provision via Stakeholder pensions. He finds there is no particular reason to favour the proposed balance of 60% private pension provision to 40% public provision over some other ratio. He also finds that Stakeholder pensions will not offer contributors complete income security in retirement due to uncertainties about investment returns, annuity rates and future inflation. Falkingham and Rake argue that the Government's proposals have failed to incorporate fully the needs of women. Women will be underrepresented amongst Stakeholder pensioners, and the exclusion of very low earners and carers with children over 5 from eligibility for the SSP will adversely affect women. Agulnik then looks at the proposed tax relief rules for Stakeholder pensions. While there are good reasons for the proposed £3,600 limit to tax relief on contributions, the retention of the existing rules for personal and occupational schemes is anomalous.

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More information

Published date: April 1999

Identifiers

Local EPrints ID: 34647
URI: http://eprints.soton.ac.uk/id/eprint/34647
PURE UUID: a69ff66e-da8a-47aa-9480-0937e2013f21
ORCID for Jane Falkingham: ORCID iD orcid.org/0000-0002-7135-5875

Catalogue record

Date deposited: 08 Feb 2008
Last modified: 16 Oct 2018 00:34

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