Sustainability of the State Pension

A Blueprint for Social Security in 21st Century Britain

Essay , 2011 , 26 Pages

Economics - Case Scenarios

It is important to recognise the complexity of the pensions system in the UK before tackling the topic. Whilst the state pension has been around in one form or another since 1908, gradual reforms to keep it applicable to modern times have been few and far between. The greatest shake-up of the pension system since its creation came into effect on April 6 2006 – known as A-Day by industry professionals, in the form of a document entitled Pension Simplification. Prior to this, there were no less than thirty-two separate rulebooks governing how pensions had to be invested and managed in the UK. Bizarrely, A-Day did not shelve these rulebooks and many of them still contain important legislation that affects pensions in the UK. Industry professionals to whom I have spoken during the course of researching this essay agree that pensions are still one of, if not the most complex areas of British personal finance that can confuse even the most seasoned of veteran investors.

For this reason, I have dealt with pensions in the UK in a level of depth that is technical, but not needlessly confusing. The important factors have been mentioned and explained, though I freely admit there is a great deal more out there that anybody would struggle to cover within the confines of a book, let alone an essay! Hopefully, the arguments conveyed and discussed from hereon in are of sufficient detail to make an informed judgement upon the sustainability of the British pension system.

Inhaltsverzeichnis (Table of Contents)

• Introduction
• Analysis of the State Pension
  • The format of the state pension
  • The Social Security Pensions Act 1975
• Pensions and the private sector
• Problems with the State Pension
  • The State Pension and the Demographic Time Bomb
  • The Impact of the State Pension on Economic Growth
  • The Cost of Pension Schemes
  • The Impact of an ageing workforce
  • The Future of Pension Provision in the UK
• The case for reform
• Alternative solutions
• Recommendations

Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)

This essay examines the sustainability of the state pension in the UK, considering its historical context, current challenges, and potential solutions. It aims to provide a comprehensive analysis of the state pension's strengths and weaknesses, exploring the impact of demographic changes, economic factors, and the increasing costs associated with pension provision.

• The sustainability of the state pension system in the face of demographic changes
• The economic impact of the state pension on growth and productivity
• The financial viability of the state pension system, including the rising costs of pension provision
• The impact of an aging workforce on the state pension system
• The future of pension provision in the UK, including potential reforms and alternative solutions

Zusammenfassung der Kapitel (Chapter Summaries)

• Introduction: This chapter provides an overview of the state pension in the UK, highlighting its historical context, key challenges, and the need for a comprehensive analysis of its sustainability. It introduces the concept of the state pension as a contentious issue and examines the various factors that have contributed to its current state.
• Analysis of the State Pension: This chapter delves into the history and structure of the state pension system, tracing its evolution since its inception in 1908. It discusses the key legislative changes that have shaped the state pension system, including the introduction of the State Earnings-Related Pension Scheme (SERPS) and the ongoing debate regarding earnings-based versus inflation-based pension payments.
• Pensions and the private sector: This chapter examines the role of private sector pensions in the UK, exploring the challenges they face and their contrasting circumstances compared to the public sector. It analyzes the difficulties associated with providing independent pension schemes in a volatile economic climate and discusses the impact of contributing to both state and private pension schemes.
• Problems with the State Pension: This chapter examines the significant problems facing the state pension system, including the demographic time bomb, economic impact, and escalating costs. It analyzes the impact of declining birth rates, rising life expectancy, and the need for a more sustainable approach to pension provision in the future.

Schlüsselwörter (Keywords)

This essay focuses on key terms and concepts such as state pension, sustainability, demographic changes, economic impact, financial viability, aging workforce, pension reform, and alternative solutions. It explores the intricacies of the state pension system in the UK, examining its historical evolution, contemporary challenges, and potential solutions for a more sustainable future.

• College: University of Exeter (Business School)
• Course: Economics of Social Policy
• Author: Alex Boni (Author)
• Publication Year: 2011
• Pages: 26
• Catalog Number: V168247
• ISBN (eBook): 9783640851577
• ISBN (Book): 9783640851638
• Language: English
• Tags: sustainability, state, pension, blueprint, social, security, century, britain