Chapter

Pension Reform and Economic Performance in Britain in the 1980s and 1990s

Edited by Richard Disney, Carl Emmerson and Sarah Smith

in Seeking a Premier Economy

Published by University of Chicago Press

Published in print July 2004 | ISBN: 9780226092843
Published online February 2013 | e-ISBN: 9780226092904 | DOI: http://dx.doi.org/10.7208/chicago/9780226092904.003.0007
Pension Reform and Economic Performance in Britain in the 1980s and 1990s

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Over the last twenty years, successive governments of the United Kingdom have embarked on a series of reforms of the pension program designed both to reduce the prospective costs of social security, and to permit more flexibility and individual choice in secondary pension provision. Central to this strategy has been an evolution of the mechanism of “contracting out,” introduced originally in 1978 as a means of integrating existing occupational pension plans into the new State Earnings-Related Pension Scheme (SERPS). This chapter explores the impact of pension reforms on the UK's economic performance. It first sketches out the British pension program, mentioning some important facets to the reform process, such as cutbacks in the flat basic state pension, and greater targeting on poor pensioners. It then discusses five aspects of the British economy where pension arrangements, and pension reform, might be expected to have some effects: household savings rates; public finances, especially the government's intertemporal budget constraint; income distribution; labor supply (and especially retirement behavior); and the general operation of the labor market.

Keywords: pension reforms; United Kingdom; pension plans; State Earnings-Related Pension Scheme; household savings; public finances; income distribution; labor supply; retirement; labor market

Chapter.  17725 words.  Illustrated.

Subjects: International Economics

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