A survey found that the number of companies closing their final-salary pension schemes to new members nearly doubled in 2002 (84 compared to only 46 in 2001). The survey also showed that average contributions to money-purchase schemes are only half those for final-salary schemes.
Source: Annual Survey of Occupational Pension Schemes 2002, National Association of Pension Funds (020 7808 1300)
Links: Press release
Date: 2002-Dec
The government issued a consultation document setting out radical proposals for simplifying the tax rules for all the various types of private pension scheme. This followed a review of the current pension tax rules carried out by a team made up of members of the Inland Revenue and nominees from pensions industry representative bodies.
Source: Simplifying the Taxation of Pensions: Increasing choice and flexibility for all, HM Treasury (020 7270 4558) and Inland Revenue
Links: Report (pdf) | IR press release
Date: 2002-Dec
A joint statement by trade unions and campaign groups criticised the government for moving pensions provision from the public to the private sphere, and called for a system of compulsory pension contributions.
Source: Facing up to the Pensions Challenge, Trades Union Congress (020 7467 1294), Help the Aged, and Consumers' Association
Links: Statement
Date: 2002-Dec
A new book by a former pensions minister proposed a 'universal protected pension': under the plan, those in work would be compelled to contribute towards a new pension scheme, in return for which they would be guaranteed an income in retirement which would lift them clear of means-tested benefits.
Source: Frank Field MP, Debating Pensions: Self-interest, citizenship and the common good, Civitas (020 7401 5470)
Links: Summary | Press release
Date: 2002-Dec
A research report said that the pension system is failing to address the needs of women, and discussed the confusion and contradictions caused by changes in pension policy.
Source: Eileen Evason and Lynda Spence, Women and Pensions, Equality Commission for Northern Ireland (028 90 500600)
Links: Report (Word file)
Date: 2002-Dec
An article examined changes in economic and social role occupancy in Great Britain across four birth cohorts passing through mid-life over the period 1985 to 2000. It was found that the proportion of people with multiple role commitments in mid-life (for example, work, care for children and care for dependent parents) is relatively low at any one point in time: but the likelihood of having multiple role commitments appears to be increasing across successive birth cohorts. Multiple role responsibilities make little difference to entitlement to basic state pensions: but there are significant differences with respect to entitlement to second tier pensions, with women (especially mothers) being particularly disadvantaged. Moreover, combining paid employment with caregiving was not an option for a significant minority of women with caring responsibilities in mid-life.
Source: Maria Evandrou and Karen Glaser, 'Changing economic and social roles: the experience of four cohorts of mid-life individuals in Britain, 1985 2000', Population Trends 110, Winter 2002, Office for National Statistics, TSO (0870 600 5522)
Links: Article (pdf) | Research findings (pdf) | ESRC press release
Date: 2002-Dec
The government actuary said in a pamphlet that state funding for pensions in the United Kingdom is lower than in any other European country: but also that the increase in overall funding needed in the UK to meet the future growth of pensioner numbers is the lowest.
Source: Chris Daykin, Pension Systems: The EU and accession countries - lessons for the UK, Politeia (020 7240 5070)
Links: Summary | Guardian report
Date: 2002-Dec
The government published a Green Paper aimed at the 'radical simplification' of pensions legislation relating to occupational and private schemes. Eight different sets of tax rules governing pensions will be replaced with a single set of rules. Pension contributions will continue to be voluntary, but the government said it will take advice from a new independent commission on whether voluntary saving is increasing quickly enough, and take action if necessary. The retirement age for people working in the public sector will be raised to 65 from 2006. Campaigners described the Green Paper as a 'missed opportunity' to create a new and more coherent pension settlement based on a partnership between state, individual and employer.
Source: Simplicity, Security and Choice: Working and Saving for Retirement, Green Paper Cm 5677, Department for Work and Pensions, Inland Revenue and HM Treasury, TSO (0870 600 5522) | House of Commons Hansard, Debate 17.12.02, columns 693-709, TSO | Press release 17.12.02, Age Concern England (020 8765 7200)
Links: Report (pdf) | Summary | Summary (pdf) | Summary (Welsh) (pdf) | Technical paper (pdf) | Press release | Hansard | Age Concern press release | Guardian analysis
Date: 2002-Dec
A think-tank pamphlet argued that concerns over future demographic changes have been greatly exaggerated. It said that older people should be enabled to lead active and independent lives for longer, and that we need to stem and reverse actions taken by governments and other institutions (as a response to the fears about an ageing population) which are making things worse.
Source: The Challenge of Longer Life: Economic burden or social opportunity?, Catalyst, available from Central Books (020 8986 4854)
Links: Summary
Date: 2002-Dec
Research found poor levels of understanding by consumers of the way pension annuities work.
Source: ORC International, Consumer Understanding of Annuities, Financial Services Authority (0845 608 2372)
Links: Report (pdf)
See also: Journal of Social Policy Volume 31/4, Digest 124, paragraph 1.5
Date: 2002-Nov
A National Audit Office report said the occupational pensions regulator has encouraged better governance of pension schemes, but needs to focus more closely on the risks to scheme members.
Source: Opra: Tackling the Risks to Pension Scheme Members, HC 1262, National Audit Office, TSO (0870 600 5522)
Links: Report (pdf) | Summary (pdf) | Press release
Date: 2002-Nov
A paper on the future of pensions said that making appropriate savings decisions is made more difficult by the complexity of the present system, and that frequent reforms have tended to add uncertainty and new complexities.
Source: Carl Emmerson, Pension Reform in the United Kingdom: Increasing the role of private provision?, Working Paper 402, Oxford Institute of Ageing/University of Oxford (01865 286190)
Links: Paper (Word file)
Date: 2002-Nov
Campaigners said in a report that people should be entitled to expect a decent income in retirement, funded both by tax/national insurance and investment products (so spreading risk between two funding techniques), and with a target level of 60 per cent of average earnings.
Source: A Future We Can Trust: Pensions or pin money?, Help the Aged (020 7278 1114)
Links: Report (pdf) | Press release
Date: 2002-Nov
A report called for a public debate on the retirement income risks that are being 'shifted on to the shoulders' of consumers and whether it is fair or appropriate for consumers to carry those risks.
Source: Retirement Roulette, National Consumer Council (020 7730 3469)
Links: Report (pdf) | Press release
Date: 2002-Nov
The Trades Union Congress said the pensions system is 'in crisis'. It called for occupational schemes to be made obligatory, with compulsory employer contributions of at least 4 per cent of wages, matched on a 2:1 basis by employees.
Source: Memorandum Submitted by the Trades Union Congress (TUC) (PEN 58), House of Commons Work and Pensions Select Committee, TSO (0870 600 5522)
Links: Submission
Date: 2002-Nov
According to a survey of over 450 employer-sponsored schemes, far too little is being saved in defined contribution pension plans to provide a decent income in retirement. Employer contributions average just 6 per cent of salary, marginally down from 6.3 per cent in a previous survey in 2000.
Source: Press release 12.11.02, Mercer Human Resource Consulting (020 222 9121)
Links: Press release
Date: 2002-Nov
The Financial Services Authority published a discussion paper examining the role of ethical values in raising trust and confidence in financial services, and offering an outline framework for action to achieve higher standards in the industry.
Source: An Ethical Framework for Financial Services, DP18, Financial Services Authority (0845 608 2372)
Links: Paper (pdf) | Press release
Date: 2002-Oct
The National Consumer Council said that consumers need to consider occupational, personal and state pensions as a whole, so policy-holders should too; that consumers on low and modest incomes often find neither private providers nor employers meet their pensions needs well; that consumers need independent, affordable and trusted financial advice on pensions; and that consumers often get a poor return on the savings fund they have built up.
Source: The Future of UK Pensions - A submission to the Work and Pensions committee, National Consumer Council (020 7730 3469)
Links: Report (pdf)
Date: 2002-Oct
The National Association of Pension Funds proposed a series of pension reforms, including replacing existing state pensions with a single, universal, flat rate 'Citizen s Pension' worth 100 a week rising in line with earnings; abolishing restrictions on retirement age, but raising the age at which the new Citizen s Pension becomes available from 65 to 70, between 2020 and 2030; and offering more generous tax treatment for longer-term savings.
Source: Pensions - Plain and Simple, National Association of Pension Funds (020 7808 1300)
Links: No link
Date: 2002-Oct
The Office for National Statistics published a review of its pension contribution statistics, carried out following the publication of inconsistent figures earlier in the year. The report supported the sources currently used, while suggesting ways in which the data could be improved further.
Source: Review of ONS Pension Contribution Statistics: Report of the Review Panel, Office for National Statistics (0845 601 3034)
Links: Report (pdf) | Press release (pdf)
Date: 2002-Oct
The government began consultation on proposals for regulating the sale of general insurance products. The Financial Services Authority would be given responsibility for regulating both mortgage business and the mediation of general insurance from the same date, October 2004; and intermediaries selling a range of products - general insurance, pensions, or mortgages - would come under the FSA as single regulator.
Source: Regulating Insurance Mediation, HM Treasury (020 7270 4558)
Links: Consultation Document (pdf) | Summary (pdf) | Press release
Date: 2002-Oct
The Financial Services Authority published a report setting out how the regulatory framework it inherited for the insurance industry is being overhauled.
Source: The Future Regulation of Insurance: A progress report, Financial Services Authority (0845 608 2372)
Links: Report (pdf) | Press release
Date: 2002-Oct
Campaigners called for a substantial rise in the basic state pension and for a link to earnings; they also said that the legal framework and level of funding of occupational pensions should be strengthened, with a pooling of risk by state-backed insurance.
Source: Work and Pensions Committee Inquiry into Future of UK Pensions: Response, Northern Pensions Resource Group (0191 232 2968) and Independent Pensions Research Group
Links: Report
Date: 2002-Oct
A survey found that over a third of employers have closed their final salary pension scheme and replaced it with a money purchase arrangement.
Source: Pensions Under Threat - A Guide to Recent Developments, Labour Research Department (020 7928 3649)
Links: Press release
See also: Journal of Social Policy Volume 31/1, Digest 121, paragraph 1.5
Date: 2002-Sep
A briefing paper said that the question of whether global financial provision for retirement is currently adequate depends on whether the labour market can absorb more older workers, what the consumption needs of older households are, and the extent to which individual behaviours will adjust to meet the pressures of retirement income provision in an ageing population.
Source: James Banks, Richard Blundell, Richard Disney and Carl Emmerson, Retirement, Pensions and the Adequacy of Saving: A Guide to the Debate, Briefing Note 29, Institute for Fiscal Studies (web publication only)
Links: Briefing note (pdf)
Date: 2002-Sep
A report argued in favour of raising the state retirement age to 70, in order to help solve an impending crisis over pensions.
Source: Alison O Connell, Raising State Pension Age: Are We Ready?, Pensions Policy Institute (020 7848 3744)
Links: Report (pdf) | Press release (pdf)
Date: 2002-Sep
An examination of the future financial needs of consumers, particularly of those on modest incomes, identified a reduced role for national government and employers, the emergence of new local providers, the need to save more, and the risk of social exclusion for some groups.
Source: Financial Futures: Report of a Scenarios Planning Event, National Consumer Council (020 7730 3469)
Links: Report (pdf)
Date: 2002-Sep
The government said, in a report submitted to the European Commission, that the United Kingdom is 'in a strong position to achieve a sustainable pension system which meets priority social needs'.
Source: United Kingdom National Strategy Report on the Future of Pension Systems, Department for Work and Pensions (020 7712 2171)
Links: Report (pdf)
Date: 2002-Sep
A briefing note looked at individuals' choice between saving in a pension, saving in other vehicles, and not saving at all.
Source: Tom Clark and Carl Emmerson, The Tax and Benefit System and the Decision to Invest in a Stakeholder Pension, Briefing Note 28, Institute for Fiscal Studies (web publication only)
Links: Briefing Note (pdf) | IFS press release
Date: 2002-Aug
A trade union report said that 12 million workers do not have an occupational pension, with unskilled workers most likely to be excluded.
Source: Uncovered: Workers without Pensions, Trades Union Congress (020 7467 1294)
Links: Press release
Date: 2002-Aug
A report proposed a new pension scheme for younger workers to replace the state second pension. A 'universal protected pension' would provide a pension (including basic state pension) of 25-30 per cent of national average earnings throughout retirement, ensuring an income above the poverty line; it would be funded by an additional 2 per cent on employee national insurance contributions, and would not be payable until age 70.
Source: Universal Protected Pension: The Follow-Up Report, Pensions Reform Group, c/o Frank Field MP, House of Commons, London SW1 1AA
Links: Guardian report
See also: Journal of Social Policy Volume 30/4, Digest 120, paragraph 1.5
Date: 2002-Aug
The number of employees building up benefits in private sector occupational pension schemes as at mid-2000 was 5.7 million, representing a continuation of the downward trend since the mid-1960s.
Source: Occupational Pension Schemes 2000, Government Actuary's Department (020 7211 2600)
Links: Report (pdf)
Date: 2002-Aug
The pensions ombudsman criticised the complex and confusing regulations for company pension schemes.
Source: Annual Report of the Pensions Ombudsman 2001-2002, Pensions Ombudsman (020 7834 9144)
Links: Report (pdf)
See also: Journal of Social Policy Volume 30/4, Digest 120, paragraph 1.5
Date: 2002-Aug
Insurance companies called on the government to scrap the maximum 1 per cent charge on stakeholder pensions, saying that the cap would have to rise to 1.5 per cent to make it financial sense for insurers to sell to people on low incomes.
Source: The Independent, 21.8.02
Links: Article
See also: Journal of Social Policy Volume 30/4, Digest 120, paragraph 1.5
Date: 2002-Aug
The independent Pickering report made proposals to simplify pensions legislation and administrative burdens on schemes and employers. The government said it posed 'tough questions' for employers, unions, pension providers and government itself. Unions criticised proposals to end index-linked pensions and guaranteed benefits for spouses.
Source: Alan Pickering, A Simpler Way to Better Pensions, Department for Work and Pensions (020 8867 3201) | Press release 11.7.02, Department for Work and Pensions (020 7712 2171) | Press release 11.7.02, Trades Union Congress (020 7467 1294)
Links: Report (pdf) | DWP Press release | TUC press release | Hansard
Date: 2002-Jul
A report argued that the government may be forced to water down the new state second pension scheme, because millions of people driven out of occupational schemes are likely to join it.
Source: Report by the ITEM Club, reported in The Independent, 22.7.02
Links: Independent article
See also: Journal of Social Policy Volume 31/4, Digest 124, paragraph 1.5
Date: 2002-Jul
The independent Sandler Review of medium and long-term retail savings published its final report, putting forward proposals for a set of simple and clear savings products accessible to the mass market. The government broadly welcomed it.
Source: Medium and Long-Term Retail Savings in the UK: A Review, HM Treasury (020 7270 4558) | House of Commons Hansard, Debate 9.7.02, columns 745-759, TSO (0870 600 5522)
Links: Report | Summary (pdf) | Treasury press release | Hansard
See also: Journal of Social Policy Volume 31/1, Digest 121, paragraph 1.9
Date: 2002-Jul
The government admitted that previously published figures on the aggregate level of pension contributions were not reliable, and said that the Office for National Statistics was carrying out an urgent review.
Source: House of Commons Hansard, Written Answers 1.7.02, column 88W, TSO (0870 600 5522)
Links: Hansard
Date: 2002-Jul
The insurance industry proposed a five-point plan aimed at increasing the level of pension savings, including two new tax credits targeted at employers.
Source: Closing the Savings Gap: Why the Savings Industry Wants Change, Association of British Insurers (020 7600 3333)
Links: Report (pdf)
Date: 2002-Jul
Research explored the circumstances of, and issues relating to, complaints made by consumers to a range of financial suppliers.
Source: BMRB International, Understanding Why Consumers Complain to Financial Suppliers and their Experiences of Complaining, Financial Services Authority (0845 608 2372)
Links: Report (pdf)
Date: 2002-Jul
The Occupational Pensions Advisory Service called for changes to the rules covering the closure of pension schemes, and in the monitoring and control of independent trustees.
Source: Pension Matters - A Review of OPAS Activities 2001-02, OPAS (the Pensions Advisory Service) (020 7630 2250)
Links: Report | Press release
Date: 2002-Jul
A report called for a higher basic state pension and a new relationship between state and non-state providers.
Source: Resolving the Pensions Dilemma, Work Foundation (formerly Industrial Society) (07970 936187)
Links: Summary
See also: Journal of Social Policy Volume 31/4, Digest 124 (paragraph 1.5)
Date: 2002-May
The financial services regulator warned that financial firms and consumers need to adopt a more pro-active approach to planning for old age.
Source: Financing the Future: Mind the Gap! The Implications of an Ageing Population - Key Findings and Proposed Actions, Financial Services Authority (020 7676 1000)
Links: Report (pdf)
See also: Journal of Social Policy Volume 30/4, Digest 120 (paragraph 12.1)
Date: 2002-May