|Date:||20 October 2015|
|Publisher:||Institute for Fiscal Studies|
The current generation of pensioners is better off than ever before, and for the first time have incomes higher on average than the rest of the population, the director of the Institute for Fiscal Studies (IFS) Paul Johnson will say in giving the inaugural Pensions Management Institute annual lecture later today (18.30 Tuesday 20 Oct 2015).
Johnson will set out how modelling by IFS researchers suggests that pensioners’ incomes will continue to rise for at least the next decade. However, it is unlikely that later generations will do as well. Future state pensions will be less generous on average, there has been an extraordinary fall in rates of home ownership, and, in the private sector, a collapse in membership of defined benefit occupational pension schemes. Younger generations are also likely bearing some of the cost of these generous occupational pension schemes from which they themselves will never benefit.
Johnson will also use his lecture to outline some policy priorities for making state and private pensions more stable and sustainable, for example ending the so called triple lock on the state pension and bringing stability to the taxation of private pensions.
Drawing on work by IFS researchers, Johnson will show how:
On state pensions Johnson will suggest that the new single tier pension for those reaching the state pension age on from next April will represent the logical culmination of 30 years of policy aimed at undoing the introduction of the State Earnings Related Pension Scheme (SERPS) in 1978. Johnson says the single tier pension represents a stable basis for future provision but:
Johnson says that rather greater change is needed in the private sector to make it work better:
IFS director Paul Johnson says [Note: quote may not appear in the unscripted lecture]: “We have achieved an astonishing turnaround in the incomes of pensioners over the last three decades, without increasing public spending to levels seen in many other continental European countries. But the longer term future looks very uncertain. Those now in their 20s, 30s and 40s may well end up with lower incomes in retirement than their parents. The focus for policy needs to be on getting private provision right, with more risk sharing, and a rational and stable tax policy.”
Notes to editors
1. The slides for the inaugural Pensions Management Institute annual lecture by the IFS director Paul Johnson are available from Jonathan Wood, IFS press & communications manager, on firstname.lastname@example.org or 020 7291 4818
2. The inaugural lecture will take place at 18.30 on Tuesday 20 October 2015 at JP Morgan Chase, 60 Victoria Embankment, Blackfriars, London. The event is fully booked.