Privatising Pensions in the UK: How to Restore Contracting Out

15 Pages Posted: 13 Jun 2014

See all articles by Philip Booth

Philip Booth

City University London - Sir John Cass Business School

Kristian Peter Niemietz

Institute of Economic Affairs

Date Written: June 2014

Abstract

For much of the post‐war period in the UK, individuals were allowed to use private pension provision to replace part of their state pension. This system was supported by all political parties but it has been eroded since the 1990s. The opportunity to ‘contract out’ of the state pension is finally being abolished by the current Conservative/Liberal Democrat coalition government. This paper proposes a new method of allowing people to contract out of the state pension system, calculates appropriate rebates of social security taxes and discusses the potential risks of adopting the proposals.

Keywords: contracting out, pensions, social security

JEL Classification: H75, I38, J14, J18

Suggested Citation

Booth, Philip and Niemietz, Kristian Peter, Privatising Pensions in the UK: How to Restore Contracting Out (June 2014). Economic Affairs, Vol. 34, Issue 2, pp. 139-153, 2014, Available at SSRN: https://ssrn.com/abstract=2450278 or http://dx.doi.org/10.1111/ecaf.12065

Philip Booth (Contact Author)

City University London - Sir John Cass Business School ( email )

106 Bunhill Row
London, EC1Y 8TZ
United Kingdom

Kristian Peter Niemietz

Institute of Economic Affairs ( email )

2 Lord North Street, Westminster
London, SW1P 3LB
United Kingdom

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