Work, Retirement and Pensions Policy - A Comprehensive Approach

Transcription

1 Work, Retirement and s Policy - A Comprehensive Approach 4th November 2002 Dr. Ros Altmann

2 Where do we begin? How can we judge the Green Paper? Framework for reform Joined up problem requires joined up solutions Help you put things in perspective Starting with pensions policy is wrong place to start

3 A Different Perspective Let s start with society - all of us Do policymakers understand people? Survey asks people what they think They think there is a crisis! Evidence based policy proposals

4 1950 s Now Future? Birth Birth Birth

5 1950 s Now Future? Birth Birth Birth years not 50 years years not 33% 67%

6 1950 s Now Future? Birth Birth Birth years not years not 50 years 42 years years not years not 33% 51% 49% 67%

7 1950 s Now Future? Birth Birth Birth years not years not years not 50 years 42 years 35 years years not years not years not 33% 41% 51% 49% 59% 67%

8 Income in Later Life - What Will We Live On? Work and Retirement

9 Income in Later Life - What Will We Live On? Work and Retirement

10 Income in Later Life - What Will We Live On? Work and Retirement

11 Income in Later Life - What Will We Live On? Work and Retirement

12 Income in Later Life - What Will We Live On? Work and Retirement s/ Other Savings

13 Income in Later Life - What Will We Live On? Work and Retirement s/ Other Savings BSP

14 Income in Later Life - What Will We Live On? Work and Retirement s/ Other Savings BSP SERPS/ S2P

15 Income in Later Life - What Will We Live On? Work and Retirement s/ Other Savings BSP SERPS/ S2P Means Tested Benefits (+MIG/ Credit)

16 Income in Later Life - What Will We Live On? Work and Retirement s/ Other Savings BSP SERPS/ S2P Means Tested Benefits (+ MIG/ Credit)

17 Income in Later Life - What Will We Live On? Work and Retirement Incentives s/ Other Savings BSP SERPS/ S2P Means Tested Benefits (+ MIG/ Credit)

18 Income in Later Life - What Will We Live On? Work and Retirement Incentives s/ Other Savings BSP SERPS/ S2P Means Tested Benefits (+ MIG/ Credit)

19 Income in Later Life - What Will We Live On? Work and Retirement Incentives s/ Other Savings BSP SERPS/ S2P Means Tested Benefits (+ MIG/ Credit)

20 Income in Later Life - What Will We Live On? Work and Retirement Incentives BSP SERPS/ S2P s/ Other Savings Means Tested Benefits (+ MIG/ Credit)

21 Income in Later Life - What Will We Live On? Work and Retirement Incentives BSP SERPS/ S2P s/ Other Savings Means Tested Benefits (+ MIG/ Credit)

22 Work and Retirement MTB + (MIG/PC) Work & Retirement s/ Other Savings SERPS /S2P BSP Annuities DC DB Policy recommendations from Survey People don t want age 70 - not one size fits all Allow part-time work, part pension, same employer Retirement - a process not event

23 Work and Retirement MTB + (MIG/PC) s s/ Other Savings SERPS /S2P BSP Annuities DC DB Final Salary pension schemes - Policy recommendations from Survey Protect workers pensions now Allow people to hold more than one type of pension Simplify to help people understand rules

24 Work and Retirement MTB + (MIG/PC) s s/ Other Savings SERPS /S2P BSP Annuities DC DB Money Purchase schemes - Policy recommendations from Survey Simplify regimes - just one type - so people can understand Give people better access to advice Improve annuity market

25 Work and Retirement MTB + (MIG/PC) Annuities s/ Other Savings SERPS /S2P BSP Annuities` DC DB Policy recommendations from Survey Everyone to get advice to find best annuity Everyone to get help to find top rate Allow money-back guarantees

26 Work and Retirement s/ MTB + (MIG/PC) Other Savings s/ Other Savings SERPS /S2P BSP Annuities` DC DB Policy recommendations from Survey Improve demand not just supply side Specialist advice - suitability Improve financial education - workplace? Women need particular help

27 Encouraging People to Save Incentives to save - problems of using tax relief Unfair - most help to highest earners Illogical - highest earners most able to save Inflexible - can only use 40% or 22% People don t understand Tax is not recouped on pensions in payment

28 Fairer and Better Savings Incentives Policy recommendations from Survey Matching grants, rather than tax relief Keep tax free cash Give everyone same incentive for same contribution Middle Britain needs better incentives than now Levelling up, not levelling down More pension for same contributions!

29 Summary Living longer is a good thing People confused about what they should be doing Support ourselves, or rely on Government People want to cut down gradually, not cliff-edge

30 1950 s Now Flexible Working Birth Birth Birth years not years not years not 50 years 42 years years not years not 82 part-time retirement 33% 24% 85 29% 51% 49% 67% 47%

31 Conclusion Choice and flexibility Save earlier and more for bigger pension/earlier retirement Work longer, part-time(?), for better standard of living Some can, some can t. Some want to, some don t Account for individual differences

32 A Whole New Way of Looking at Policy Joined up thinking for Work, Retirement and s Dr. Ros Altmann ros@rosaltmann.com

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