Advanced Search
MyIDEAS: Login to save this paper or follow this series

Private Pensions and Equity in Ireland and the U.K

Contents:

Author Info

  • Gerard Hughes

    (Economic and Social Research Institute (ESRI))

Registered author(s):

    Abstract

    The strong link between private pensions and employment status means that there is little interest in the equity of private pension arrangements since it is expected that inequality in earnings will be reproduced in inequality in pensions. Nevertheless, the equity of private pensions is an issue as governments in mainly English speaking OECD countries subsidise their provision through the tax system and governments in a number of EU countries are now considering this policy as a way of coping with increases in long-term pension costs due to ageing of their populations. The favourable tax treatment of private pensions provided in Ireland and the United Kingdom is outlined and compared with the tax treatment of private pensions in OECD countries. It is shown that the annual cost of tax expenditure on pensions amounted to over 1 per cent of GDP in both countries in 1997, that it substantially exceeded the cost of their means-tested social assistance schemes and amounted to two-thirds of direct expenditure on social insurance pensions in Ireland and to one-third in the U.K. Evidence relating to the distribution of pension tax expenditure shows that the present tax treatment of private pensions is inequitable as about two-thirds of the benefits accrue to the top two income deciles in both countries and 3 per cent or less to the bottom two deciles. Proposals for containing the cost of public pension systems in Europe by relying on greater private pension provision in the future can learn from experience in Ireland and Britain that using tax incentives to promote private pension provision could impose substantial costs on the Exchequer. The regressive nature of such incentives means that all taxpayers have to pay more taxes to provide benefits which accrue overwhelmingly to higher income taxpayers.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.esri.ie/UserFiles/publications/20060831090929/WP0142%20Private%20pensions%20and%20equity.pdf
    File Function: First version, 2002
    Download Restriction: no

    Bibliographic Info

    Paper provided by Economic and Social Research Institute (ESRI) in its series Papers with number WP142.

    as in new window
    Length: 20 pages
    Date of creation: Mar 2002
    Date of revision:
    Handle: RePEc:esr:wpaper:wp142

    Contact details of provider:
    Postal: Whitaker Square, Sir John Rogerson's Quay, Dublin 2
    Phone: (353-1) 863 2000
    Fax: (353-1) 863 2100
    Email:
    Web page: http://www.esri.ie
    More information through EDIRC

    Related research

    Keywords:

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. Whitehouse, Edward, 1999. "The tax treatment of funded pensions," Social Protection Discussion Papers 20126, The World Bank.
    2. Munnell, Alicia H., 1991. "Are Pensions Worth the Cost?," National Tax Journal, National Tax Association, vol. 44(3), pages 393-403, September.
    3. Malcolm Edey & John Simon, 1998. "Australia's Retirement Income System," NBER Chapters, in: Privatizing Social Security, pages 63-97 National Bureau of Economic Research, Inc.
    4. Martin Feldstein & Andrew Samwick, 1998. "The Transition Path in Privatizing Social Security," NBER Chapters, in: Privatizing Social Security, pages 215-264 National Bureau of Economic Research, Inc.
    5. Phil Agulnik & Julian Le Grand, 1998. "Tax relief and partnership pensions," Fiscal Studies, Institute for Fiscal Studies, vol. 19(4), pages 403-428, November.
    6. Alan Budd & Nigel Campbell, 1998. "The Roles of the Public and Private Sectors in the U.K. Pension System," NBER Chapters, in: Privatizing Social Security, pages 99-134 National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:esr:wpaper:wp142. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sarah Burns).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.