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Supplementary pension coverage in Britain

Author

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  • Armando Barrientos

Abstract

The 1986 Social Security Act introduced far-reaching changes to the supplementary pension environment in Britain, encouraging the growth of defined contribution pension plans and especially personal pensions. This paper examines the pattern of supplementary pension coverage of employees in Britain five years after the implementation of the Act, using cross-sectional data from the Family Resources Survey 1993-94. Two-thirds of employees in Britain are covered by private contracted-out pension schemes. Employer-provided defined benefit pension schemes remain the dominant type of supplementary pension scheme. The growth of personal pension plans is more marked among manual, less-skilled, workers in smaller establishments. The paper concludes that, in the absence of further pension reform, adverse labour market conditions will exert downward pressure on private pension coverage.

Suggested Citation

  • Armando Barrientos, 1998. "Supplementary pension coverage in Britain," Fiscal Studies, Institute for Fiscal Studies, vol. 19(4), pages 429-446, November.
  • Handle: RePEc:ifs:fistud:v:19:y:1998:i:4:p:429-446
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    File URL: http://www.ifs.org.uk/fs/articles/barr_nov98.pdf
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    References listed on IDEAS

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    1. Andrew A. Samwick & Jonathan Skinner, 1998. "How Will Defined Contribution Pension Plans Affect Retirement Income?," NBER Working Papers 6645, National Bureau of Economic Research, Inc.
    2. Bodie, Zvi, 1990. "Pensions as Retirement Income Insurance," Journal of Economic Literature, American Economic Association, vol. 28(1), pages 28-49, March.
    3. Green, Francis, 1982. "Occupational Pension Schemes and British Capitalism," Cambridge Journal of Economics, Oxford University Press, vol. 6(3), pages 267-283, September.
    4. Loewenstein, George F & Sicherman, Nachum, 1991. "Do Workers Prefer Increasing Wage Profiles?," Journal of Labor Economics, University of Chicago Press, vol. 9(1), pages 67-84, January.
    5. Dorsey, Stuart, 1987. "The Economic Functions of Private Pensions: An Empirical Analysis," Journal of Labor Economics, University of Chicago Press, vol. 5(4), pages 171-189, October.
    6. Gregg, Paul & Wadsworth, Jonathan, 1995. "A Short History of Labour Turnover, Job Tenure, and Job Security, 1975-93," Oxford Review of Economic Policy, Oxford University Press, vol. 11(1), pages 73-90, Spring.
    7. Richard A. Ippolito, 1987. "The Implicit Pension Contract: Developments and New Directions," Journal of Human Resources, University of Wisconsin Press, vol. 22(3), pages 441-467.
    8. Mitchell, Olivia S, 1988. "Worker Knowledge of Pension Provisions," Journal of Labor Economics, University of Chicago Press, vol. 6(1), pages 21-39, January.
    9. Teresa Ghilarducci, 1992. "Labor's Capital: The Economics and Politics of Private Pensions," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262071398, March.
    10. Bloom, David E & Freeman, Richard B, 1992. "The Fall in Private Pension Coverage in the United States," American Economic Review, American Economic Association, vol. 82(2), pages 539-545, May.
    11. Blake, David, 2003. "Pension Schemes and Pension Funds in the United Kingdom," OUP Catalogue, Oxford University Press, edition 2, number 9780199243532.
    12. Dilnot, Andrew & Disney, Richard & Johnson, Paul & Whitehouse, Edward, 1994. "Pensions policy in the UK: An economic analysis," MPRA Paper 10478, University Library of Munich, Germany.
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    Cited by:

    1. Whitehouse, Edward, 2000. "Pension reform, financial literacy and public information: a case study of the United Kingdom," MPRA Paper 10323, University Library of Munich, Germany.
    2. Richard Disney & Carl Emmerson & Sarah Smith, 2004. "Pension Reform and Economic Performance in Britain in the 1980s and 1990s," NBER Chapters,in: Seeking a Premier Economy: The Economic Effects of British Economic Reforms, 1980-2000, pages 233-274 National Bureau of Economic Research, Inc.
    3. Alessandra Guariglia & Sheri Markose, 2000. "Voluntary Contributions to Personal Pension Plans: Evidence from the British Household Panel Survey," Fiscal Studies, Institute for Fiscal Studies, vol. 21(4), pages 469-488, December.
    4. James Banks & Carl Emmerson, 2000. "Public and private pension spending: principles, practice and the need for reform," Fiscal Studies, Institute for Fiscal Studies, vol. 21(1), pages 1-63, March.

    More about this item

    JEL classification:

    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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