
Contents
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Introduction Introduction
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Political and institutional legacies: background to the reforms Political and institutional legacies: background to the reforms
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The existing system and the ‘pays to save’ problem The existing system and the ‘pays to save’ problem
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The reforms The reforms
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Earnings-related pension: continuing a voluntarist approach Earnings-related pension: continuing a voluntarist approach
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Vulnerabilities in the reformed system Vulnerabilities in the reformed system
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Reversing the spread of means testing Reversing the spread of means testing
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Ensuring that more people save more into pensions Ensuring that more people save more into pensions
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‘Pays to save’, auto-enrolment and generic advice ‘Pays to save’, auto-enrolment and generic advice
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Towards a new pension settlement? Towards a new pension settlement?
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Notes Notes
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References References
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Seven The role of confidence and identity in civic participation: exploring ethnic group differences
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Three Towards a new pension settlement? Recent pension reform in the UK
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Published:June 2008
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Abstract
In December 2002, the Labour government announced the formation of the Pensions Commission. In 2005, the Commission published comprehensive proposals for pension reform in their second report and it was a remarkable achievement; the proposals gained a broad acceptance from the government and opposition parties, trades unions, employer organisations, the insurance industry, special interest groups and the voluntary sector. In November 2006, the reform packages began to crystallise with the introduction of the first Pensions Bill which eventually became the 2007 Pensions Act. In 2007, the government published the second Pensions Bill, which at the time of writing aims to reform the private and occupational pension system, to take effect from 2012. Although this Bill attracted more controversy, there is again a substantial political and stakeholder consensus for the broad content. All reforms are incremental to the existing system, yet the reform package has the capability to alter the pension landscape dramatically. This chapter discusses the implementation of these reforms to the state pension after the major Turner Commissions on Pensions. It documents the decline of defined benefits in favour of defined contributions schemes, together with the new development of Personal Accounts and an assessment of their likely impact. In conclusion, the chapter suggests that the new pensions structure is a return to the Beveridge flat-rate system. Furthermore, it suggests that low earners and those with intermittent employment records may make ‘bad’ decisions about their pensions due to lack of clear guidance and advice available to this group. This may result in increasing inequalities between public and private pensions provision.
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