Occupational pension schemes pass the high water mark
Well, Iíve just been reading the Government Actuaryís Department (GAD) survey on occupational pension schemes and itís left me gobsmacked I can tell you. I know what youíre thinking, ďget a life, why donít you?Ē, or something similar, but I tried that once and I didnít really like it. Iím happy as I am. Happy and gobsmacked as it now turns out. Iíll tell you why.
The GAD guys do their survey once every four years or so, and theyíve been doing it since before Elvis Presley became famous way back in the 1950s. So, trend-wise it gives useful stuff for us to mull over. This last one was done in the year 2000 (it takes a while to put together and print) and it marks a bit of a turning point for UK occupational pensions.
One trend that these surveys have shown over the last twenty years has been the steady decline in the number of people in occupational pension schemes. Back in the 1960s, when the UK workforce numbered, I think, something around 18 million, we reached a high-water mark of 12.2 million* occupational pension scheme members. These days, the workforce numbers around 25 million** people, but this latest survey shows only 10.1 million people were in occupational pension schemes in the year 2000. Itís stats like this, by the way, that get the policy guys in Government tearing their hair out and wondering what can be done to get pensions spreading again.
One thing thatís been on the up and up, though, ever since these surveys first started, has been the number of people in the country receiving an occupational pension. Itís always been on the up and up, that is, until now. For the first time ever, the GAD survey shows a fall in the number of people receiving a pension derived from occupational pension membership. Thatís why Iím gobsmacked. It looks like weíre over the top of the hill occupational pension-wise, and on our way down the other side. Back in 1995 when the last GAD survey was undertaken, there were 8.5 million people receiving occupational pension payments, whereas in 2000 that number is down to 8.2 million. These are not strictly comparable figures as income drawdown policies were available between 1995 and 2000, but perhaps all this means the UK pensions success story is over, and its heyday was way back in the 60s and 70s. I hope not. What this should really be seen as is a wake up call to those who are responsible for setting pension policy. It is obviously important that we urgently address the real pension issues confronting us before itís too late. Something has to be done to ensure that employers are incentivised to establish new pension schemes and to maintain existing ones. At the same time pension saving must be made suitable to all in the UK workforce and something done to remove the disincentives to saving produced by the steady creep of means-tested benefits for pensioners.
I know Iíve said it before, but Iíll say it again here. (Iím not proud, or tired.) We need to establish a pension environment in the UK where every pound someone puts into a pension makes them at least one pound better off than those who choose not to save. We also need a tax system that either rewards employers who provide pension schemes for their employees, or penalises those who do not. I donít think thatís too much to ask for quite frankly. If we could have those things then maybe, just maybe, the GAD survey in 2012 might make better reading all round. I do hope so.
Anyone wishing to read the 2000 GAD survey in full by the way can find it on the web at
2000 GAD Survey
23 June 2003
*Occupational Pensions June 2003 - Focus GAD Survey
**Pensions Pocket Book 2003
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