Pension Commission: 10 Years On

The International Longevity Centre-UK is an independent, non-partisan think-tank

dedicated to addressing issues of longevity, ageing and population change.

Pension Commission: 10 Years On

ILC-UK Retirement Income Summit 2016



The Pension Commission set out 4 scenarios

Working longer

Saving more

Paying more tax or

Poorer pensioners

But what happened?



Are we working longer?



People continue to spend an increasing proportion of their time in retirement

Source: ILC-UK analysis of DWP and ONS. Average time in retirement calculated as cohort life expectancy at average age of exit from the workforce.



The average age of exit from the labour force is increasing. But it is still below what it was in the 1970s

Source: DWP and ONS



Are we saving more?



Auto-enrolment has delivered a growing % of employees with workplace pensions



But median contribution rates are on DC schemes are low

Source: ILC-UK analysis of ONS data



A growing % of us have no savings. Final salary pension coverage is falling.

Declining final salary (DB) pension coverage (UK)



And the young are less well placed to save



Are we paying more taxes?



Effective tax rates during the last decade have been relatively low by historic standards.

Source: ILC-UK analysis of ONS data. Notes: There is a break in the time series for original income between 1976 and 1977.



There is much talk of older people taking a growing % of the cake. Spending on pensioner benefits as a % of GDP is above the long run trend, while spending on working age benefits is marginally below.



Are we seeing poorer pensioners?



Tackling pensioner poverty has been a major success (for now). Average pensioner incomes are predicted to decline in 10 years. The end of the golden age?



International Longevity Centre-UK

Date post:	10-Jan-2017
Category:	Government & Nonprofit
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Pension Commission: 10 Years On

Government & Nonprofit