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Who wins? Evaluating the impact of UK public sector pension scheme reforms

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  • Danzer, Alexander M.
  • Dolton, Peter
  • Bondibene, Chiara Rosazza

Abstract

Radical changes have been implemented to pension schemes across the UK public sector from April 2015. This paper simulates how these changes will affect the lifetime pension and how the negotiated pension changes compare across six public sector schemes by level of education. Specifically, we simulate the occupation specific Defined Benefit (DB) pension wealth accumulated for a representative employee over the lifecycle by factoring in the recent changes to pension conditions. We find that less educated workers with low or moderate earnings in the NHS, Local Government and Civil Service schemes are the winners having secured an increase in the value of their pension of between 10–20 per cent. Graduate workers with faster wage growth in the Civil Service, Teachers and Local Government schemes lose between 3 per cent and 5 per cent. This is in sharp contrast with the Police and Fire services who have lost around 40 per cent irrespective of their education.

Suggested Citation

  • Danzer, Alexander M. & Dolton, Peter & Bondibene, Chiara Rosazza, 2016. "Who wins? Evaluating the impact of UK public sector pension scheme reforms," National Institute Economic Review, National Institute of Economic and Social Research, vol. 237, pages 38-46, August.
    • Handle: RePEc:cup:nierev:v:237:y:2016:i::p:r38-r46_15
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    References listed on IDEAS

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    1. Richard Disney & Carl Emmerson & Matthew Wakefield, 2008. "Pension Provision and Retirement Saving: Lessons from the United Kingdom," Canadian Public Policy, University of Toronto Press, vol. 34(s1), pages 155-176, November.
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    Cited by:

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    3. J. Suresh Kumar & D. Shobana, 2023. "Evaluating the Implementation and Outcomes of the PMSYM Pension Scheme for Unorganized Sector Workers in India," Shanlax International Journal of Economics, Shanlax Journals, vol. 12(1), pages 100-109, December.

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    More about this item

    JEL classification:

    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets

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