Estimating economic and social welfare impacts of pension reform

Clement van de Coevering, Daniel Foster, Paula Haunit, Cathal Kennedy, Sarah Meagher and Jennie Van den Berg

MPRA Paper from University Library of Munich, Germany

Abstract: This paper examines the impact of two effects of the pension reform package that the UK Government put forward in the May White Paper Security in retirement: the likely increase in the number of older people working due to a higher State Pension age and the likely rise in saving due to more people putting away money for retirement. The overall effect of changes to State Pension age and the introduction of personal accounts on UK incomes is likely to be in the range of 0.9 – 3.1 per cent. Although these numbers are relatively small proportions of the total economy, they represent significant sums. In terms of today’s economy, they would be worth around £11 – 38 billion. This paper also applies an innovative economic analysis to examine the scale of the increase in people’s wellbeing as a result of improved consumption smoothing. It finds that if people save for retirement through personal accounts, then generally their wellbeing will be enhanced.

Keywords: pension reform; consumption smoothing; social welfare (search for similar items in EconPapers)
JEL-codes: E17 E20 H31 (search for similar items in EconPapers)
Date: 2006-11-29
New Economics Papers: this item is included in nep-mac and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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