The government began consultation on proposals to regulate workplace pension schemes. The consultation would close on 19 December 2013.
Source: Reshaping Workplace Pensions for Future Generations, Department for Work and Pensions
Links: Consultation document | DWP press release
Date: 2013-Nov
The government began consultation on proposals to introduce a range of measures to restrict pension charges levied in workplace defined contribution pension schemes.
Source: Better Workplace Pensions: A consultation on charging, Department for Work and Pensions
Links: Consultation document | DWP press release | BBC report | Guardian report | PwC press release
Date: 2013-Oct
A study examined automatic enrolment in pension schemes of large employers. The study found that the average opt-out rate was nine per cent and opt-out was highest among the 50 plus age group. Employers had started to prepare at least a year in advance and reported that the key challenges were categorizing and assessing workers, adapting payroll systems, and communicating changes to workers. Set-up costs included developing payroll systems, legal advice, and holding staff consultations.
Source: Automatic Enrolment: Qualitative research with large employers, In-House Research 851, Department for Work and Pensions
Links: Report
Date: 2013-Oct
The fair trading watchdog said that competition alone could not be relied upon to drive value for money for all savers in defined-contribution workplace pension schemes. This was because of the complexity of the product, and because employers often lacked the capability or the incentive to assess value for money. These weaknesses posed risks to savers that required remedial steps.
Source: Defined Contribution Workplace Pension Market Study, Office of Fair Trading
Links: Report | OFT press release | CBI press release | NAPF press release | PAS press release | PwC blog post | TUC press release | Daily Mail report | Guardian report | Professional Pensions report | Telegraph report
Date: 2013-Sep
An article examined cross-national differences in Europe in attitudes towards: cuts in old-age pension benefits; increases in social security contributions; and increases in the statutory retirement age. In countries with higher statutory retirement ages, people were more likely to support a postponement of retirement. But in countries with higher poverty among older people, they were less likely to support cuts in pension benefits. In countries with higher social security contributions, people were less likely to support further increases in these contributions.
Source: Juan Fernandez and Antonio Jaime-Castillo, 'Positive or negative policy feedbacks? Explaining popular attitudes towards pragmatic pension policy reforms', European Sociological Review, Volume 29 Number 4
Links: Abstract
Date: 2013-Aug
An analysis found that most people previously entitled to the state second pension would lose out under the new single-tier pension from 2016. Anyone with a long work history would be worse off: high earners would lose most, but people on low-to-middle incomes (£10,000 to £26,000) could also lose significant amounts. Those set to benefit from the new scheme, such as low earners and carers, would only do so at the point when the reforms first took effect: in time, their retirement incomes would fall too. A worker earning £10,000, but retiring in the 2040s, would be between £18 and £32 per week worse off.
Source: Press release 19 August 2013, Trades Union Congress
Links: TUC press release | Analysis (spreadsheet) | BBC report | Guardian report | Professional Pensions report | Public Finance report
Date: 2013-Aug
An article examined the appropriateness of a public or private orientation of pension systems in the light of the global financial crisis. It compared the British and French pension systems, as 'archetypes' of private-oriented and public-oriented systems, respectively. Both systems had strengthened the role played by means-tested benefits and minimum pensions for low-income groups, in order to offset weaknesses emphasized by the crisis.
Source: Christine Lagoutte and Anne Reimat, 'Public or private orientation of pension systems in the light of the recent financial crisis', Review of Social Economy, Volume 71 Issue 3
Links: Abstract
Date: 2013-Aug
A trade union report examined the impact of variations in life expectancy on the amount of state pension that people were set to receive after 2028 (the date by which the state pension age would have been raised to 67). It said that a woman living in the area with the longest post-65 life expectancy could expect to live nine years longer than one in the area with the shortest life expectancy – thereby collecting £67,000 more in state pension income. For men, the comparable gap would be £53,000. Millions of people would also receive less in state pension income, because their life expectancy was not keeping pace with the increasing state pension age.
Source: Life Expectancy Inequalities and State Pension Outcomes, Trades Union Congress
Links: Report | TUC press release
Date: 2013-Aug
An article examined factors affecting women's private pension scheme membership, such as educational attainments, income, occupational group, full-time/part-time status, and whether an individual had any dependent children. It showed that these characteristics played an important role in access to private pensions. Strategies to alleviate disadvantages needed to take into account the complex circumstances that individuals experienced throughout the life course, which resulted in gendered pension provision.
Source: Liam Foster and Jon Smetherham, 'Gender and pensions: an analysis of factors affecting women's private pension scheme membership in the United Kingdom', Journal of Aging and Social Policy, Volume 25 Issue 3
Links: Abstract
Date: 2013-Jul
A report examined the role that money played in social housing residents' lives, their financial and social attitudes and aspirations, and their worries and concerns. It proposed a model by which social landlords could effectively support a 'silent majority' of their residents to save regularly and to establish or improve their financial security.
Source: Bad Weather, Good Habits: Encouraging social housing tenants to save more, Lemos&Crane
Links: Report | L&C press release | Inside Housing report
Date: 2013-Jul
A report examined the extent to which pension tax relief met its objective of incentivizing pension saving, and analyzed options for reform. The existing pension tax relief system was tax-advantaged compared with other savings such as ISAs, with the tax-free lump sum of up to 25 per cent of the pension being particularly valuable. Individuals who paid higher-rate income tax when working (and so got tax relief at the higher rate), but who paid basic rate tax in retirement, got an even larger benefit.
Source: Melissa Echalier, John Adams, Daniel Redwood, and Chris Curry, Tax Relief for Pension Saving in the UK, Pensions Policy Institute
Links: Report | PPI press release | TUC blog post | Public Finance report
Date: 2013-Jul
An audit report said that government measures to reduce the liability of the state for supporting people in their retirement were being managed separately, without adequate consideration of their combined impact on the overall objective of increasing retirement incomes. There was no overarching programme or single accountability for encouraging people to save for retirement.
Source: Government Interventions to Support Retirement Incomes, HC 536 (Session 2013-14), National Audit Office, TSO
Links: Report | NAO press release | Guardian report | Professional Pensions report | Public Finance report
Date: 2013-Jul
A think-tank report examined how the proposed new single-tier state pension scheme would affect different types of individuals. Women approaching retirement and self-employed people would gain from the reforms, whereas employees in their thirties would lose.
Source: Rowena Crawford, Soumaya Keynes, and Gemma Tetlow, A Single-Tier Pension: What Does it Really Mean?, Research Report 82, Institute for Fiscal Studies
Links: Report | IFS press release | JRF blog post | Guardian report
Date: 2013-Jul
The coalition government announced that it would end the annual contribution limit and transfer restrictions on auto-enrolled workplace pensions (the National Employment Savings Trust) but not until 2017.
Source: Supporting Automatic Enrolment: The government response to the call for evidence on the impact of the annual contribution limit and the transfer restrictions on NEST, Cm 8668, Department for Work and Pensions, TSO
Links: Report | Hansard | DWP press release | TUC press release | Professional Pensions report
Date: 2013-Jul
The Pensions Bill was given a second reading. The Bill was designed to:
Introduce a single-tier state pension system, replacing the existing basic state pension and earnings-related top-up. It would be implemented from April 2016.
Bring forward the increase in the retirement age to 67 by 8 years, so that it would come into force between 2026 and 2028.
Make provision to continually review the retirement age in the light of the increase in people's life expectancy.
Make it a legal requirement for the pensions regulator to consider minimizing the economic impact of pension provision on a company that provided this for its employees.
Source: Pensions Bill, Department for Work and Pensions, TSO | Debate 17 June 2013, columns 647-725, House of Commons Hansard, TSO
Links: Bill | Explanatory notes | HOC research brief | Hansard
Date: 2013-Jun
A new book examined social policy developments under the coalition government across a range of key policy areas. It included chapters dealing with health policy, pensions, fuel poverty and climate change, unemployment and activation policies, precarious employment, and the proposed new universal credit.
Source: Gaby Ramia, Kevin Farnsworth, and Zoe Irving (eds), Social Policy Review 25: Analysis and debate in social policy, 2013, Policy Press
Links: Summary
Date: 2013-Jun
A paper examined the prospects for harmonizing retirement pensions systems in the European Union.
Source: Florence Legros, The Future of Retirement Pensions in the European Union, Robert Schuman Foundation
Date: 2013-Jun
A trade union report said that the recommendations of the independent Pensions Commission (2011) had provided the opportunity to build a new progressive pensions consensus, but that several problems still needed to be tackled:
The 'single tier' state pension was set too low, as it would reduce the share of national income going to state pensions over time, compared with the existing system.
Minimum contribution rates no more than 6.8 per cent, rather than the 8 per cent usually quoted were not enough to provide a decent retirement income.
There was market failure across pensions provision, as suppliers were smarter and more powerful than the employers choosing auto-enrolment pensions, and there was no guaranteed worker voice.
Improving defined-contribution, rather than deregulating defined-benefit, pensions should be the focus of the government's 'defined ambition' agenda.
Source: Craig Berry and Nigel Stanley, Third Time Lucky: Building a progressive pensions consensus, Trades Union Congress
Links: Report | TUC press release | Professional Pensions report
Notes: Pensions Commission report (March 2011)
Date: 2013-May
The coalition government published the Pensions Bill. The Bill was designed to:
Introduce a single-tier state pension system, replacing the existing basic state pension and earnings-related top-up. It would be implemented from April 2016.
Bring forward the increase in the retirement age to 67 by 8 years, so that it would come into force between 2026 and 2028.
Make provision to continually review the retirement age in the light of the increase in people's life expectancy.
Make it a legal requirement for the pensions regulator to consider minimizing the economic impact pension provision had on a company that provided it for its employees.
Source: Pensions Bill, Department for Work and Pensions, TSO | Government Response to the Fifth Report of the House of Commons Work and Pensions Select Committee, Session 2012-13, into Part 1 of the Draft Pensions Bill, Cm 8620, Department for Work and Pensions, TSO
Links: Bill | Explanatory notes | Impact assessment | Cabinet Office briefing | HOC research brief | Response to Select Committee | Hansard | CBI press release | Fawcett Society press release | NAPF press release | NPC press release | Professional Pensions report
Date: 2013-May
A think-tank report said that the coalition government's proposed reforms to the four largest public service pension schemes would reduce the average value of the pension benefit for members of these schemes by more than a third, and reduce long-term government expenditure on unfunded public service schemes by around a quarter.
Source: Niki Cleal, Chris Curry, Leandro Carrera, John Adams, and Daniel Redwood, The Implications of the Coalition Government's Public Service Pension Reforms, Pensions Policy Institute
Links: Report | Briefing | PPI press release | Nuffield Foundation press release | Guardian report
Date: 2013-May
A think-tank report said that workplace occupational pensions needed to be reformed to deliver value for money. All pension providers should 'acquire scale', reform their governance, and lower costs to savers.
Source: Gregg McClymont MP and Andy Tarrant, Pensions at Work, that Work: Completing the unfinished pensions revolution, Fabian Society
Date: 2013-May
An article examined the effects of labour migration on public pension systems in European countries from 1981 to 2009. Labour migration had deterred the reduction of public pension benefit levels and government expenditure on pensions, as well as the expansion of private pensions. This implied that labour migration eased the pressure on public pension systems. Migration effects had been larger in countries with Bismarckian pension systems because those countries had experienced greater pressure on public pension systems than other countries.
Source: Kyung Joon Han, 'Saving public pensions: labor migration effects on pension systems in European countries', The Social Science Journal, Volume 50 Issue 2
Links: Abstract
Date: 2013-May
The European Commission announced that it had dropped plans to include solvency requirements for occupational pension funds in a revised Directive due to be presented in autumn 2013. It said that 'further technical information' was needed on the issue.
Source: Press release 23 May 2013, European Commission
Links: EC press release | DWP press release | CBI press release | Professional Pensions report | Telegraph report
Date: 2013-May
A report by an official advisory body examined the likely impact of proposals by the European Commission on the solvency of occupational pension schemes. It estimated that defined-benefit (DB) schemes in the United Kingdom might need an extra £450 billion of funds in order to meet the proposed new requirements.
Source: QIS on IORPs: Preliminary results for the European Commission, European Insurance and Occupational Pensions Authority
Links: Report | DWP press release | NAPF press release | TUC blog post | Professional Pensions report
Date: 2013-Apr
An article examined the coalition government's argument that public sector pension schemes needed reform on the grounds that existing provision was 'unfair'. Three dimensions of 'fairness' were considered between public and private sector provision, between the costs to public sector employees and other taxpayers, and between members of public sector schemes. There were serious weaknesses in the coalition's position on each of these dimensions weaknesses rooted in the discussion of public sector pensions in isolation from the overall pattern of occupational pension provision.
Source: Tony Cutler and Barbara Waine, 'But is it "fair"? The UK coalition government, "fairness" and the "reform" of public sector pensions', Social Policy and Administration, Volume 47 Number 3
Links: Abstract
Date: 2013-Apr
The Public Service Pensions Act 2013 was given Royal assent. The Act implemented previously announced changes including linking the retirement age for public sector workers to the state pension age and altering the basis of defined-benefit schemes from final salary to career average earnings. The coalition government said that the Bill would save £65 billion over the subsequent 50 years.
Source: Public Service Pensions Act 2013, HM Treasury, TSO
Links: Act
Date: 2013-Apr
The coalition government announced (following consultation) plans to help people take their workplace pension with them when they changed job, through a system of automatic transfers of small pension pots. It also announced the abolition of short service refunds.
Source: Automatic Transfers: Consolidating Pension Savings, Cm 8605, Department for Work and Pensions, TSO
Links: Report | Hansard | DWP press release | CBI press release | TUC press release | Professional Pensions report
Notes: Consultation document (December 2011)
Date: 2013-Apr
A report by a committee of MPs said that workplace pensions governance should be overseen by a single regulatory body.
Source: Improving Governance and Best Practice in Workplace Pensions, Sixth Report (Session 2012-13), HC 768, House of Commons Work and Pensions Select Committee, TSO
Links: Report | Committee press release | Oral and written evidence | Additional written evidence | CBI press release | TUC press release | UKSIF press release | BBC report | Daily Mail report | Guardian report | Professional Pensions report
Date: 2013-Apr
A report by a committee of MPs said that improvements in retirement income under the new single-tier state pension were welcome: but the key to the policy's successful implementation lay in the government informing the public as soon as possible how it would affect individuals.
Source: The Single-Tier State Pension: Part 1 of the Draft Pensions Bill, Fifth Report (Session 2012-13), HC 1000, House of Commons Work and Pensions Select Committee, TSO
Links: Report | Additional written evidence | Committee press release | BBC report | Public Finance report
Date: 2013-Apr
An article examined whether it was worthwhile for some people to participate in pension schemes that were not mandatory particularly those with low incomes and/or potentially broken careers based on a study of schemes in the United Kingdom and Germany. The small pensions that they accumulated in such schemes merely offset entitlements to means-tested pension benefits, leaving them no better off in old age.
Source: Bernard Casey and Jorg Michael Dostal, 'Voluntary pension saving for old age: are the objectives of self-responsibility and security compatible?', Social Policy and Administration, Volume 47 Number 3
Links: Abstract
Date: 2013-Apr
A paper outlined findings from modelling designed to estimate the behavioural impact of: raising the state pension age from 65 to 68; a flat-rate state second pension scenario compared with the earnings-related system as it stood in 2011-12; and a single-tier scenario compared with a flat-rate scenario.
Source: Justin van de Ven, Analysis of Pension Reform Scenarios in a Rational World: An application of the NIBAX behavioural micro-simulation model, Working Paper 117, Department for Work and Pensions
Links: Working paper
Date: 2013-Mar
The coalition government informed MPs of plans to bring forward the launch of a new single-tier state pension by a year, to April 2016. (The plans had been announced by the Chancellor of the Exchequer two days previously in a television interview.)
Source: Written Ministerial Statement 19 March 2013, columns 44-46WS, House of Commons Hansard, TSO
Links: Hansard | DWP press release | ILCUK press release | TUC press release | BBC report | Public Finance report
Notes: The Chancellor also told television viewers of the government's intention to introduce a cap on social care costs in England on the same date as the new pension scheme. The cap would be set initially at £75,000 instead of £72,000.
Date: 2013-Mar
A paper examined the best measure of pension adequacy. It said that defects in existing measures could be remedied by using adequacy indicators based on estimates of pension wealth (that is, the total projected flow of pension benefits through retirement) calculated using more realistic labour market assumptions.
Source: Aaron George Grech, How Best to Measure Pension Adequacy, CASEpaper 172, Centre for Analysis of Social Exclusion (London School of Economics)
Links: Paper
Date: 2013-Mar
A survey of 'leading thinkers on economics' examined whether the United Kingdom would be able to pay off its pension liabilities in the future. 36 (75 per cent) of the respondents said that public sector pension liabilities would not be paid in full. Almost half (46 per cent) said that the basic state pension would be means-tested by 2040.
Source: David Kingman (ed.), Can the UK Afford to Pay for Pensions? 50 expert economists give their view, Intergenerational Foundation
Links: Report
Date: 2013-Feb
A report by a committee of MPs said that the contributions cap and ban on transfers under the new auto-enrolled workplace pensions scheme should be lifted immediately, and should not be delayed until 2017.
Source: Lifting the Restrictions on NEST, Fourth Report (Session 201213), HC 950, House of Commons Work and Pensions Select Committee, TSO
Links: Report | TUC press release
Date: 2013-Feb
An article quantified the value and risk of defined-contribution pension plans, using data from 16 developed countries. Pension risk was substantial, with an all-equity fund the dominant investment strategy. There was a 10 per cent chance that a United Kingdom pensioner would receive a pension that was only one-third of their final salary.
Source: Edmund Cannon and Ian Tonks, 'The value and risk of defined contribution pension schemes: international evidence', Journal of Risk and Insurance, Volume 80 Issue 1
Links: Article | Abstract | Bristol University press release
Date: 2013-Feb
An article examined pension reforms in the United Kingdom, United States of America, Canada, and New Zealand in the 2000s. Because the pension systems had differed significantly at the point of reform, the paths followed had also varied considerably in terms of whether they focused on 're-commodification', 'cost-containment' or 'recalibration'.
Source: David Lain, Sarah Vickerstaff, and Wendy Loretto, 'Reforming state pension provision in "liberal" Anglo-Saxon countries: re-commodification, cost-containment or recalibration?', Social Policy and Society, Volume 12 Issue 1
Links: Abstract
Date: 2013-Feb
An article examined the idea of possible conflicts between generations in the context of pension systems, based on experiences in Germany, the Netherlands, and Britain. In order to form interest groups that could engage in such a conflict, the generations in question would have to form clear collectives with strong agendas: but the concept of generation was rather vague, and it was not possible to define a generational collective characterized by its experiences of, and attitudes towards, the welfare state or the pension system. There was also no evidence to be found for specific generations perceiving themselves as winners or losers, or showing an outspoken conflict potential that would mark them as actors in generational disputes.
Source: Christina May, 'Generation in itself or for itself? The conflict potential of cohorts in the German, Dutch and British pension systems compared', European Societies, Volume 15 Issue 1
Links: Abstract
Date: 2013-Feb
A think-tank paper said that public sector pensions would cost £9 billion more than previously estimated because of the interaction between proposals in the Public Service Pensions Bill and the White Paper on the single-tier pension. It called for the Bill to be halted until the White Paper's cost implications for it were thoroughly examined: this should include the use of up-to-date projections for life expectancy.
Source: Michael Johnson, A Toxic Tangle: The Public Service Pensions Bill and the DWP's White Paper, Centre for Policy Studies
Links: Paper | Daily Mail report | Public Finance report | Telegraph report
Date: 2013-Feb
The coalition government published a White Paper on the reform and simplification of state pensions. A single-tier pension would be paid to every qualifying new pensioner from April 2017, replacing the existing basic state pension and the state second (earnings-related) pension. It would initially be set at £144 per week at 2013 prices, significantly higher than the existing basic pension level of £107.45. A contribution record of 35 years would be required (including credits for periods of caring responsibility), compared with the existing 30 years. The government said that the changes would be cost-neutral in the long run. Those who would gain included women with a broken contribution record, self-employed people, and those on low earnings. Those who would lose included members of public sector pension schemes, who would no longer be able to opt out of the second state pension and would have to pay higher national insurance contributions as a result. The state pension age would in future rise in line with average life expectancy. A linked qualitative research report examined people's attitudes to a single-tier pension, and to the balance between fairness and simplicity in pensions arrangements.
Source: The Single-Tier Pension: A simple foundation for saving, Cm 8528, Department for Work and Pensions, TSO | Andrew Thomas, Josh Hunt, and Alice Coulter, A Simpler State Pension: A qualitative study to explore one option for state pension reform, Research Report 787, Department for Work and Pensions
Links: White Paper | Hansard | DWP press release (1) | DWP press release (2) | Impact assessment | Research report | Research summary | HOC research brief (1) | HOC research brief (2) | Conservative Party press release | BCC press release | CBI press release | GAD bulletin | Intergenerational Foundation blog post | IOD press release | Labour Party press release | NAPF press release | PAS press release | BBC report | Daily Mail report | Guardian report (1) | Guardian report (2) | Professional Pensions report (1) | Professional Pensions report (2) | Public Finance report | UnionNews report
Date: 2013-Jan
An article examined the effects of pension reform on hours worked by different generations, education of young people, retirement decisions of older workers, and aggregate growth in developed (OECD) countries. Simulation results favoured an intelligent pay-as-you-go system above a fully funded private system. Positive effects on employment and growth were the strongest when the pay-as-you-go system included a tight link between individual labour income and the pension, and when it attached a high weight to labour income earned as an older worker to compute the pension assessment base.
Source: Tim Buyse, Freddy Heylen, and Renaat Van de Kerckhove, 'Pension reform, employment by age, and long-run growth', Journal of Pension Economics and Finance, Volume 26 Issue 2
Links: Abstract
Date: 2013-Jan
The Draft Pensions Bill was published. The Bill was designed to introduce proposals for a single-tier state pension scheme from 2017.
Source: Draft Pensions Bill, Cm 8529, Department for Work and Pensions, TSO
Links: Bill | Hansard | DWP press release
Notes: White Paper (January 2013)
Date: 2013-Jan