Pension Politics: A Conspicuous Absence
| Author | Craig Berry |
| Published date | 01 September 2021 |
| Date | 01 September 2021 |
| DOI | http://doi.org/10.1177/20419058211045133 |
16POLITICAL INSIGHT•SEPTEMBER 2021
Pensions policy rarely makes
the headlines in the UK.
Rishi Sunak’s hint that he
might suspend the so-called
‘triple lock’ on state pensions is the
only recent exception. If pensions
were genuinely an uneventful area of
public policy, this omission would be
regrettable, but perhaps understandable:
if nothing is happening, there is
nothing to talk about. A less forgiveable
explanation is that pensions provision
is relatively neglected because it is
complicated.
Pensions policy is complicated,
extraordinarily so. The peculiar temporality
of pensions provision is at the heart of this
complexity. Pensions are about finding
ways to ensure the income we put aside
retains its value in real terms over several
decades. The state pension ‘triple lock’
is one of the few policy issues with any
degree of prominence, but also illustrates
rather well how we are blindsided by
pensions temporality. In the short-term,
by allowing for above-inflation increases
in state pension payments, the policy
benefits the already-old. But its principal
beneficiaries are the not-yet-old – even
if this effect is unintended by the current
government. The fact that the vast
majority of pensions policy decisions do
not have a meaningful short-term impact,
is precisely how recent governments
have been able to transform UK pensions
provision, apparently in response to
a crisis of rapid population ageing, in
ways which – irrespective of the triple
lock – will be hugely damaging to future
generations.
Pension
Politics: A
Conspicuous
Absence
Pensions provision in the UK has been undergoing an upheaval for
several decades. Despite the significant risk of poor outcomes for
millions of savers in the automatic enrolment system, pensions policy
receives little attention in political debates, or by political scientists,
writes Craig Berry.
The long pensions revolution
‘Liberalisation’ has been the somewhat
euphemistic principle underpinning several
decades of policy upheaval. It is fair to
suggest that (some) employers initiated this
process in the 1980s, as those in declining
industries began to close their occupational
pension schemes, and new service
sector employers (often headquartered
overseas) declined to set one up. Private
pensions provision has always operated
on voluntaristic basis; or, you could say,
provision has always been highly liberalised,
with no or minimal state direction.
Yet further liberalisation has certainly
been supported and driven by government
too. The Thatcher government allowed
employers to take ‘holidays’ from
contributing into their pension schemes –
which contributed to nancial distress – and
extended scal subsidies to individualised
‘dened contribution’ provision alongside
collectivised ‘dened benet’ provision.
Dened benet provision involves risk-
pooling between workers and their
employers. Dened contribution, in contrast,
makes individuals solely responsible for
© Simon Dawson / Alamy Stock Photo
Political Insight September 2021.indd 16Political Insight September 2021.indd 1616/08/2021 15:2316/08/2021 15:23
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