British Pension Policy in the Twenty‐first Century: a Partnership in Pensions or a Marriage to the Means Test?

Rake, Katherine; Falkingham, Jane; Evans, Martin

doi:10.1111/1467-9515.00192

Cited by 36 publications

(6 citation statements)

References 2 publications

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“…A third new element is regulated low-cost, private-funded pension schemes. In short, rather than reinvigorating the Beveridgean notion of reciprocity, the needs principle is likely to be consolidated or even expanded in the UK pension system (Rake et al, 2000), while the relevance of income from private and occupational pensions is expected to grow.…”

Section: United Kingdommentioning

confidence: 99%

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Changing Principles in European Social Security

Clasen¹,

Oorschot²

2002

European Journal of Social Security

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The provision of social security benefits rests on normative principles of social justice. Most strongly manifest in earnings-related social insurance, the principle of reciprocity has been increasingly questioned on grounds of equity, adequacy and fiscal viability, in the wake of socio-economic changes (e.g. post-industralisation, globalisation) and political developments (e.g. Europeanisation). Universalist programmes seem extraordinarily expensive under tight public budgets, and could be criticised as inequitable at a time when middle classes increasingly rely on individual and occupational forms of income security. The principle of need appears to have become more prominent within modern European social security systems keen on targeting resources. Is there empirical evidence which would reflect these alleged trends? Concentrating on three principles inherent in social security transfers (need, universalism and reciprocity) the major concerns of this article are conceptual and empirical. First, it addresses the problem of operationalising social security principles and delineating indicators of change over time. Second, it applies two of these indicators in order to identify and compare the extent to which the three principles have gained or lost prominence since the early 1980s, with empirical evidence taken from the Netherlands, United Kingdom, Germany and Scandinavia. The article argues first that, applying either indicator, there is no cross-national trend towards squeezing reciprocity-based social insurance, but that a convergence between erstwhile strong (Bismarckian) and weak (Beveridgean) principled programmes can be identified. Second, a clear trend towards needs-based social security can be identified within the ‘legal’ but not within the ‘volume’ perspective, at least in some programmes and some claimant groups. This is due to both policy changes and favourable labour market conditions. Third, two countries indicate very diverse trends. British social security is distinctive in terms of the erosion of Beveridgean reciprocity, as well as the growing strength of the needs principle. In the Netherlands, there have been considerable shifts in principles underlying certain programmes, but no general trend in either direction can be observed. On the whole, Dutch social security continues to exhibit a strong mix of principles.

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Section: United Kingdommentioning

confidence: 99%

“…Accordingly, the relative share of means-tested transfers rose from 17 per cent of all social security spending in the late 1970s to 33 per cent by the end of the 1990s (DSS, 1999). Recent changes in pension arrangements are likely to consolidate or even expand it (Rake et al, 2000).…”

Section: United Kingdommentioning

confidence: 99%

Changing Principles in European Social Security

Clasen¹,

Oorschot²

2002

European Journal of Social Security

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“…14 This means that the hybrid nature of the system, which recog-nises employment and care as well as marriage, remains, with increases for low-paid women. Despite these improvements, the development will not change the fact that public pensions will remain below subsistence level; calculations suggest that in 2040, when S2P matures, many of its recipients will receive a pension below the level of social assistance either when they retire or very soon after (Rake, Falkingham & Evans, 2000, Ginn 2001. Aware of this problem, the government raised the level of the means-tested social assistance above the poverty line for pensioners only to provide a minimum income threshold (Clark 2001).…”

Section: Pension Reforms In the United Kingdom Since 1997mentioning

confidence: 99%

Untitled

2006

Int J Ageing Later Life

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as an attached file in Word or rtf format, with a covering email giving full contact details and position(s) held by the author(s). Papers should be anonymised, ready for sending to referees. Where papers have more than one author, the contact author should be clearly specified in the covering email. Submission of a manuscript to the journal is taken to imply that the article has not previously been published, and is not considered for publication elsewhere. The ownership of material published in IJAL remains with the author(s). Articles should generally contain between 4,000 and 10,000 words, including references and endnotes, 1.000-3.000 words for review articles, comments and debates, and ca. 1,000 words for book reviews. Authors are responsible for obtaining permission from copyright holders for reproducing any illustrations, tables, figures or lengthy quotations previously published elsewhere.

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“…Defined‐benefit pension schemes are clearly the most generous type of provision available, regarding absolute outcome and the relationship between employee contributions and benefits, and unlike other forms of occupational provision, the size of benefit on retirement they provide is not left open to the vagaries of the stock market or annuity market. The state pension—both tiers—is minuscule in comparison (Rake et al 2000). To match the DB level in other schemes involves a significant reduction in their available incomes for employees, and current savings figures show that they save at far below that level (Oliver Wyman 2001).…”

Section: Defined‐benefit Schemes and Their Role For Social Inclusionmentioning

confidence: 99%

When Do Benevolent Capitalists Change Their Mind? Explaining the Retrenchment of Defined-benefit Pensions in Britain

Bridgen¹,

Meyer²

2005

Social Policy & Admin

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This paper explores the politics of welfare retrenchment, but differs from much of the current literature in this area by focusing not on the decisions of politicians but those of private sector employers. In countries with a large private welfare sector, employers are major social policy players with a significant influence on the generosity of welfare provision, but the rationale behind their actions is not well understood. To explore these issues, a case study is used of the recent fundamental change in UK occupational pension provision, involving a rapid shift from defined-benefit to defined-contribution pensions. The paper shows by means of a micro-simulation of the relative performance of defined-benefit, defined-contribution and state pensions that this shift represents a significant retrenchment. It suggests, using historical material, interview data and insights from behavioural economics, that existing explanations for this change, while valuable, have important gaps because they are based on too narrow a conceptualization of business motives. In this regard, the paper highlights the importance of herd behaviour. . For an overview, see Grabher and Powell (). . In the summer of  we conducted  expert interviews with all the major members of the British pension policy network, including the Minister for Pensions, the social policy spokesperson for the Conservative Party, major trade unions, the insurance industry and the CBI. These interviews lasted one hour. Our main aim was to discuss policies that would make the British pension system more socially inclusive. . All five workers could be either men or women, even though the full-time career on average wages is more common for men. We chose a gender for the sake of style. . Citing Ostaszewski (), they describe this change as New Economy Theory. . Between  and  the number of UK VAT-registered companies with a turnover of more than £ million rose by  percentage points (statistics.gov.uk, own calculations). . An interlocking directorship involves one person sitting on the boards of two companies. These can be directional interlocks, where the person has strong connections with at least one of the companies, or non-directional, where the person is affiliated to a third institution.

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British Pension Policy in the Twenty‐first Century: a Partnership in Pensions or a Marriage to the Means Test?

Cited by 36 publications

References 2 publications

Changing Principles in European Social Security

Changing Principles in European Social Security

Untitled

When Do Benevolent Capitalists Change Their Mind? Explaining the Retrenchment of Defined-benefit Pensions in Britain

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