Pensions and Savings in the UK. Matthew Wakefield The Institute for Fiscal Studies January 2004. Outline. Why an economic policy issue? Responding to the ageing population Pressures on UK pensions system Conceptual framework What this suggests about UK policies
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The Institute for Fiscal Studies
Allocation of scarce resources
Reasons for policy intervention?
Why more reforms?
Not overhaul of ‘voluntarist’ system nor of incentives currently provided
(DB & DC form)
State 2nd Pension (S2P)), formerly SERPS
First tier (mandatory)
Pension Credit, formerly MIG
Three points at which savings could be taxed:
Matched savings vehicle to lower-income adults
Personal Pensions and Saving
People will respond to incentives:
Impact on Household saving rate
(occ pen holders and mis-selling)
Opting out and the public finances
Case study of PPs gives us economic analysis of substitution and wealth effects on savings, and also public finance analysis