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Pensions 'privatisation' in Britain: two decades reviewed
[working paper]
Corporate Editor
Universität Bielefeld, Fak. für Soziologie, Institut für Weltgesellschaft
Abstract 1 Introduction
It appears that the United Kingdom has been quite successful with a political agenda
that many countries have adopted later on: the privatisation of pension provision. At
the beginning of the 1980s both state and non-state actors had their roles as providers
of old age pensions, t... view more
1 Introduction
It appears that the United Kingdom has been quite successful with a political agenda
that many countries have adopted later on: the privatisation of pension provision. At
the beginning of the 1980s both state and non-state actors had their roles as providers
of old age pensions, the state’s role being rather weak by European standards. Still,
the Thatcher government set out to widen the scope of occupational and individual
private pension provision further while containing the future costs of state pensions.
When the New Labour government took office, it abolished the previous State Earnings-
Related Pension Scheme (SERPS) for a new State Second Pension that offers better
value for employees on low earnings. The state scheme will become less generous
for its remaining members, who are expected to contract out, taking advantage of the
new stakeholder pensions. If one takes a closer look however, it becomes apparent that things are not quite that
simple. State and private pensions in Britain interact in many ways. To find the appropriate
regulatory framework for private pensions and to achieve a sustainable
public/private mix in pension provision remains high on the political agenda (Bonoli
and Palier 2000: 173).
These aims trigger further state intervention. There never really was a clear-cut
boundary between the public and the private spheres during the past 20 years of
British pension policy. But the distinction of the two is even more blurred today.
Drawing on recent theoretical approaches highlighting changes in the social production
of welfare (especially the growth of “welfare markets” and the rise of the “regulatory
welfare state”), I will compare the public/private mix of the UK pension system
of the early 1980s with the present setting and analyse to what extent these
measures may be characterised as “privatisation” in this context. I will argue that
whilst the term is quite appropriate regarding some aspects of the process (e.g. lower
state benefits, new private actors, more choice for individuals) it seems less so for others: “Private” pensions are subsidised and heavily regulated by the state. Insufficient
“private” provision and means tested state benefits are linked in multiple ways. Empirically my analysis draws partly on 31 expert interviews I conducted with decision
makers, experts and influential actors in the field of old-age security in the UK
in 2004/5.2 In the first part of this paper I will sketch out the UK pension landscape of
the early 1980s (2). Then I will illustrate the changes that led to the current arrangement
(3) which is outlined afterwards (4). This provides the background for the assessment
of whether the term “privatization” aptly describes these changes (5). I will
finally delineate the problems inherent in the British pension policy approach (6) before
I close with some concluding remarks.... view less
Keywords
welfare state; pension; Great Britain; provision for old age; old age; pension insurance; private provision; privatization
Classification
Social Security
Method
epistemological
Document language
English
Publication Year
2005
City
Bielefeld
Page/Pages
29 p.
Series
REGINA - Arbeitspapier, 10
Status
Published Version; reviewed
Licence
Deposit Licence - No Redistribution, No Modifications
Data providerThis metadata entry was indexed by the Special Subject Collection Social Sciences, USB Cologne