Towards a ‘balanced’ approach to pensions reform? Individuals, the state and employers in the restructuring of post-retirement income in the UK
Towards a ‘balanced’ approach to pensions reform? Individuals, the state and employers in the restructuring of post-retirement income in the UK
This paper tests the feasibility of individual saving as a solution to the pensions crisis and, heeding the Pensions Commission’s call for a ‘balanced’ approach to the UK’s problems, investigates the effect on individual savings rates of changes in state and occupational provision: ie the re-introduction of the Basic State Pension earnings link and a return to an average pension contribution of 8% for those employers currently providing occupational pensions. The paper is based on a series of micro-simulations of the pension entitlements of a selection of illustrative ‘risk biographies’, which are founded upon a critique of similar calculations undertaken by the DWP and Pensions Commission.
The paper shows that:
1. The introduction of typical risks (eg care responsibilities, unemployment, early retirement) to individual life biographies, and the use of an adequacy standard based on relative poverty, significantly increases the rate of saving required to secure an adequate income in retirement in comparison with the savings rates outlined by the DWP and Pensions Commission.
2. A relatively small change in the current policies of the state and some employers has the potential to make the prospect of an increased reliance on individual savings a more feasible prospect.
3. Greater intervention by the state and/or employers would nevertheless be required to cater for those with greater periods out of the workforce and/or working in sectors uncovered by occupational provision.
Bridgen, Paul
6a2060f6-cbab-47d4-a831-ff82350055c9
Meyer, Traute
ee469bf0-ab32-43ac-9f25-1261c24123fe
October 2005
Bridgen, Paul
6a2060f6-cbab-47d4-a831-ff82350055c9
Meyer, Traute
ee469bf0-ab32-43ac-9f25-1261c24123fe
Bridgen, Paul and Meyer, Traute
(2005)
Towards a ‘balanced’ approach to pensions reform? Individuals, the state and employers in the restructuring of post-retirement income in the UK
(Pensions Institute Discussion Paper Series, PI-0509)
London, GB.
Cass Business School
23pp.
Record type:
Monograph
(Discussion Paper)
Abstract
This paper tests the feasibility of individual saving as a solution to the pensions crisis and, heeding the Pensions Commission’s call for a ‘balanced’ approach to the UK’s problems, investigates the effect on individual savings rates of changes in state and occupational provision: ie the re-introduction of the Basic State Pension earnings link and a return to an average pension contribution of 8% for those employers currently providing occupational pensions. The paper is based on a series of micro-simulations of the pension entitlements of a selection of illustrative ‘risk biographies’, which are founded upon a critique of similar calculations undertaken by the DWP and Pensions Commission.
The paper shows that:
1. The introduction of typical risks (eg care responsibilities, unemployment, early retirement) to individual life biographies, and the use of an adequacy standard based on relative poverty, significantly increases the rate of saving required to secure an adequate income in retirement in comparison with the savings rates outlined by the DWP and Pensions Commission.
2. A relatively small change in the current policies of the state and some employers has the potential to make the prospect of an increased reliance on individual savings a more feasible prospect.
3. Greater intervention by the state and/or employers would nevertheless be required to cater for those with greater periods out of the workforce and/or working in sectors uncovered by occupational provision.
This record has no associated files available for download.
More information
Published date: October 2005
Identifiers
Local EPrints ID: 39793
URI: http://eprints.soton.ac.uk/id/eprint/39793
ISSN: 1367-580X
PURE UUID: 51694884-34fa-4948-98a5-a64554195ed8
Catalogue record
Date deposited: 29 Jun 2006
Last modified: 23 Jul 2022 01:47
Export record
Download statistics
Downloads from ePrints over the past year. Other digital versions may also be available to download e.g. from the publisher's website.
View more statistics
