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Expensive, Ineffective and Unequal: Why Incentives Aren't The Answer to the Pensions Crisis
Trade Union Congress
United Kingdom
October 2005
Opponents of a greater compulsory element in the UK's pension system have suggested that incentives could provide an alternative way of increasing levels of private saving.
This paper considers the effectiveness of incentives and who they would benefit. It concludes that incentives are not an effective enough response to reverse the decline in pension provision in the UK.
Greater incentives are likely to:
-Have less of an impact amongst those who are currently un-pensioned, such as the low-paid;
-Increase complexity and, by extension, costs;
-Be ineffective at overcoming behavioural obstacles to saving;
-Fail to significantly affect the overall savings level, but rather alter its composition.
Therefore a greater element of compulsion will be required to increase savings.
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the full report.
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