Chapter

Can personal pensions bridge the savings gap? Regulation and performance of personal pensions in Great Britain and Germany

Michaela Willert

in Converging Worlds of Welfare?

Published in print May 2011 | ISBN: 9780199584499
Published online September 2011 | e-ISBN: 9780191728792 | DOI: http://dx.doi.org/10.1093/acprof:oso/9780199584499.003.0011

Series: Creating Sustainable Growth In Europe

Can personal pensions bridge the savings gap? Regulation and performance of personal pensions in Great Britain and Germany

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This chapter’s main question is whether personal pensions are able to bridge the savings gap in Great Britain and in Germany. The savings gap is defined as gap between state pension income and the social inclusion line from Chapter 10. Two determining factors are assessed: the take-up of voluntary pensions and the performance of pension products. It is argued that both factors are influenced by state regulation and its interaction with strategies on the part of pension providers, such as life insurers. The chapter shows how the regulation of welfare markets where citizens voluntarily purchase pension products has developed since 1988 in the UK and 2002 in Germany. Through micro-simulations the performance of the savings products is demonstrated. The analysis shows that the savings gap may be closed for middle to higher earners, but the inclusiveness of the pension arrangements as a whole must be questioned in both countries.

Keywords: personal pensions; savings; regulation; welfare markets; performance; inclusiveness; life insurers

Chapter.  9057 words.  Illustrated.

Subjects: Economic Development and Growth

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