Financial incentives to save for retirement
Research Report No. 403
by Elaine McCauley and Will Sandbrook
This report presents the analysis underlying the Government's estimates of the financial incentives to save in pensions under the reforms proposed in the May White Paper Security in Retirement: towards a new pensions system. The analysis is based on the Department for Work and Pensions' modelling of illustrative individuals. This report presents the main results, the sensitivity of these results to variations in the characteristics assumed, and comparisons with incentives without the proposed reforms. It sets this in the context of wider influences on the decision to save (or not) for retirement. It shows that a large majority of people can expect to get a good payback from saving in personal accounts.
This analysis focuses on financial payback. Estimating the economic and social welfare impacts of pension reform presents analysis of the benefits of income smoothing.
December 2006
ISBN 1 84712 117 9
