“Thatcher’s children”, pensions and retirement ‐ Some survey evidence

Date01 August 2001
Publication Date01 August 2001
AuthorColin Duncan,Wendy Loretto,Phil White
SubjectHR & organizational behaviour
Personnel Review,
Vol. 30 No. 4, 2001, pp. 386-403.
#MCB University Press, 0048-3486
Received May 1999
Revised December 1999
Accepted March 2000
``Thatcher's children'',
pensions and retirement
Some survey evidence
Wendy Loretto, Phil White and Colin Duncan
University of Edinburgh, Edinburgh, United Kingdom
Keywords Pensions, Retirement, Young people, United Kingdom
Abstract Despite major changes in the UK pensions scene, including policy initiatives by
successive governments, very little is known about people's attitudes towards many pensions
related issues. Reports the results of a survey of undergraduates, born on the threshold of the
Thatcher era, who are themselves about to embark upon influential careers. The findings relate
both to knowledge of pension and retirement details, and the students' own pension and career
plans. In the spirit of the 1980s, the students, especially the males, attached some importance to
``individual choice'' in pension arrangements. The need for a role for the State was acknowledged,
whilst occupational pensions were not rated highly in employment choice terms. The overall
pattern of responses allows for some tentative evaluation of recent Labour Government proposals
and speculation of future developments in the field of provision for retirement.
There has probably never been a time in British socio-economic history when
more scrutiny was given to retirement from employment, and the provision of
retirement income, than in the past 20 years. As testament to this scrutiny, one
need merely cite official and semi-official publications of the 1990s: Department of
Social Security (DSS) (1991; 1993; 1996; 1998); Equal Opportunities Commission
(EOC) (1996); Office of Fair Trading (OFT) (1997a; 1997b); and Pension Provision
Group (PPG) (1998).
Among a plethora of retirement foci in the UK, three have been particularly
prominent. First, various calculations have projected a prospective decline in
the population at working age after 2010. This will have the effect of reducing
the number of workers for every pensioner from 3.4:1 now to 2:1 in 2040
(Daykin and Lewis, 1999). The question of the financial support by, and for, the
elderly will become increasingly critical.
The second focus is that of an increasing number of employees,
predominantly, but not exclusively, men, who have become economically
inactive some years prior to the State pension age (Rein and Jacobs, 1993). A
multiplicityof factors has contributed tothis phenomenon. At one extreme, there
has been a positive option for relief from employment, greatly facilitated by
occupational pension benefits (Campbell, 1999). At the other extreme, employees
The research register for this journal is available at
The current issue and full text archive of this journal is available at
The authors would like to thank the Department of Business Studies for its assistance with this
project. Especial thanks are due to Dr Jake Ansell, Katharine Angus, Terry White, and of course
to the undergraduates who participated in the survey. The authors also gratefully acknowledge
the helpful and constructive comments made by the anonymous referees on an earlier draft of
this article.
(especially unskilled men) have been dismissed on grounds of age: employers
have literally found no further use for them (Campbell, 1999). Whatever the
reason along that continuum, ``early retirement'' has become a widespread
expectationeven a ``right'' among a large segmentof the working population.
Third, although of significance in their own right, rates of economic
inactivity are but a facet of a wider revolution in working patterns, including
the growth of self-employment, part-time work, and fixed-term contracts. The
greater the discontinuities which affect people's working lives, whether by
accident or design, the more problematic it may be for people to provide
financially for their retirement.
Against that background, this article is focused upon the attitudes and
perceptions of 460 undergraduates, who, arguably should have some
awareness of the various pension-related debates and controversies. The views
of a group of young people about to embark upon their careers is also of
significance to employers and policy-makers as today's undergraduates will
inherit the consequences of the current debates, and may be instrumental in
shaping their outcomes. However, before the findings are reported and then
discussed, the changing British pensions scene must first be sketched.
The British pensions scene
State pensions
Since the State Old Age Pension was first introduced in 1908, there have been
many changes in relative gender entitlement, as well as statutory supplements
to the basic State pension, including provisions under the National Insurance
Act 1959, and the addition of the State Earnings Related Pension Scheme
(SERPS) in 1978 (DSS, 1991, p. 9). However, there have been two developments
which are especially germane to this article. First, under the Social Security Act
1980, future annual increases in the pension were to be linked to the Consumer
Price Index, rather than to that for earnings, as had hitherto been the case. This
change has led to a slower annual increase in pension values. For example, in
1996 UK consumer prices stood at 222.8 (1980 = 100), compared to average
earnings at 291.4 (Kessler and Bayliss, 1998, pp. 46-7).
A further major change to State pensions was made in 1995. Under the
Pensions Act of that year, it was decided that women's State pension ages
should be aligned upwards with the men's age of 65, by 2020. Among the
justifications advanced for the 1980 and 1995 decisions included public
expenditure considerations, and growing equality of treatment between men
and women in various pension arrangements (DSS, 1991, p. 56).
Occupational pension schemes
Pensions provided by employers have existed in Britain since the nineteenth
century (Hannah, 1986). During the twentieth century, however, occupational
pensionschemes have become more widespread, and increasinglysophisticatedin
their administration, financing and investments. One recent estimate has placed
the valueof UK pension fundsat £650 billion(Incomes Data Services, 1997).

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT