Prepared for retirement? The adequacy and distribution of retirement resources in England

The adequacy of wealth among those approaching retirement

“…Likely pension income at the SPA is estimated for each individual based on their private pension membership, the detailed information they provide on their pension schemes (including scheme rules and their current contribution rates), their reported work history and numerous assumptions about past and future behaviour. 4 3 This assumption differs from the treatment in Banks et al (2005) and Banks, Emmerson and Tetlow (2007), whose approach was to assume no real growth in non-pension wealth between the most recent data and the respondent's SPA. However, Nationwide Building Society (2008) estimated that the long-run trend growth in real house prices in the UK has been around 2.7% a year.…”

“…The most comprehensive investigation of the adequacy of likely retirement resources among individuals in England was contained in Banks et al (2005). This report provides an update and extension of that work using the English Longitudinal Study of Ageing (ELSA).…”

“…Reforms to the state pension system introduced in Pensions Act 2007 (motivated by the recommendations of the Pensions Commission) changed the amount that individuals could expect from the state pension, while the financial crisis affected asset prices and potentially the amount that individuals could expect from their private pensions. This report therefore acts to update and extend Banks et al (2005), using more recent ELSA data, collected in 2008−09 and 2010−11, 2 and incorporating the rules in place following the Pensions Act 2007 when estimating likely state pension income.…”

Pensioner poverty over the next decade: what role for tax and benefit reform?

“…In particular, we assume that public sector workers have an accrual fraction of 1 / 80 and that private sector workers have an accrual fraction of 1 / 60 . For a more detailed summary of accrual fractions in DB schemes amongst ELSA respondents, see Banks, Emmerson and Oldfield (2005). 12 We assume that individuals' salaries used for the purposes of calculating DB pension entitlement do not grow in real terms beyond 2002-03.…”

“…Detailed analysis of the distribution of private pension wealth can be found in chapter 3 of Banks, Emmerson, Oldfield and Tetlow (2005).…”