1,214 research outputs found
The Saving Gateway and the Child Trust Fund: Is asset-based welfare 'well fair'?
The 2001 Labour Party manifesto committed the government to introducing a 'Child Trust Fund' and a 'Saving Gateway' in the current parliament. This Commentary assesses these two policy proposals. It looks for possible rationales behind the government's plans for some form of asset-based welfare. It provides a discussion of many of the issues important to the design of the Child Trust Fund and the Saving Gateway. It also presents new evidence on the characteristics, incomes and savings of lower-income groups who might be eligible for the Saving Gateway
Two cheers for the Pension Credit?
On 6 October 2003, the pension credit replaced the minimum income guarantee as the principal means-tested benefit for families containing an individual aged 60 or over. This Briefing Note examines the impact of this reform. A finding is that with regards to the government's objectives of giving more resources to low- to middle-income pensioners, rewarding pensioners for having saved in the past and encouraging people of working age to save for the future, the pension credit is likely to achieve the first two but not the third.
This Briefing Note is set out as follows. Section 2 describes how the pension credit operates and why the problems that occurred with the Inland Revenue's administration of the new tax credits for families with children in April 2003 should not occur with the pension credit. The distributional impact of the reform is shown in Section 3. Section 4 discusses the inevitable problem of incomplete take-up of the new payment. Section 5 discusses the likely impact of the pension credit on saving and Section 6 discusses some of the longer-term issues that it raises. Section 7 concludes
Differential mortality in the UK
In this paper we use the two waves of the British Retirement
Survey (1988/89 and 1994) to quantify the relationship between
socio-economic status and health outcomes. We find that, even
after conditioning on the initial health status, wealth rankings
are important determinants of mortality and the evolution of
the health indicator in the survey. For men aged 65 moving
from the 40th percentile to the 60th percentile in the wealth
distribution increases the probability of survival by between 2.4
and 3.4 percentage points depending on the measure of wealth
used. A slightly smaller effect is found for women of between
1.5 and 1.9 percentage points. In the process of estimating
these effects we control for non-random attrition from our
sample
Achieving simplicity, security and choice in retirement? An assessment of the government's proposed pensions reforms
On 17 December 2002, the government published a Department for Work and Pensions Green Paper about working and saving for retirementŇą and a set of Inland Revenue proposals for reforms to the tax treatment of private pensions.2 Of the options explored in the two papers, it is claimed that Ń´hese proposals for better information, simpler pensions, simplified tax treatment, better protection and more flexible retirement are designed to enable people to make their own choices for retirement' (DWP Green Paper, Summary, 66, 10).
The perceived need for yet more reforms to the UK pension system seems to stem from the governmentŇł belief that Ń°erhaps 3 million people are seriously under-saving (or planning to retire too soon)' and that ŃĄ further group of between 5 and 10 million people may want to consider saving more or working longer' (DWP Green Paper, 3, 16, 36). In this Briefing Note, we discuss whether or not the proposed reforms are likely to help individuals to make choices about how to provide for their retirement that are appropriate to their circumstances. We focus particularly on whether or not the proposals might prompt those individuals who are not thought to be providing sufficiently for their retirement to save more each year or to retire at an older age than might otherwise have been the case. This would help alleviate concerns about underprovision.
The structure of our discussion is as follows. Section 2 describes the main proposed reforms. Section 3 discusses whether they are likely help individuals to make saving decisions that are appropriate to their circumstances. Section 4 looks at how the reforms might affect retirement ages. Section 5 concludes
The 2007 Comprehensive Spending Review: a challenging spending review?
In advance of the publication of the CSR, this briefing note examines what we already know about the CSR settlement, what remains to be announced and what this might imply for government departments and public services
Taxation
This Briefing Note examines the evolution of the tax burden over the last 50 years. It then looks at the proposals in the parties' manifestos.
* Net taxes and National Insurance contributions have risen from 34.8% of national income in 1996Öš7 to 36.3% in 2004Ö°5. According to Treasury projections, these will rise to 38.5% of national income in 2008Ö°9. This would be the highest level since 1984Ö¸5.
* Total government revenues have averaged 38.4% of national income under the two Labour governments, compared with 40.6% over the 18 years of Conservative government from 1979 to 1997. According to Treasury forecasts, revenues will equal 39.3% of national income in 2005Ö°6, rising to 40.6% by 2009Öą0. This would be the highest level since 1988Ö¸9.
* Over LabourŇł two parliaments since 1997, current receipts have risen by 3.5% a year on average, in real terms, while national income rose by 2.8% on average, leaving national income minus tax to rise at 2.4% on average.
* Of the total ò8.5 billion revenue increase seen since 1996֚7, ù9.1 billion was due to discretionary changes to the tax system, with the remainder being due to the impact of the economy on overall revenues. The largest discretionary change occurred in the first Budget after the 2001 election (the Spring 2002 Budget), which increased taxes to yield an additional Ú.9 billion by 2005ְ6.
* Between 1997 and 2005, the UK saw one of the highest increases in revenues among OECD countries, although the UK remains a low-tax economy compared with EU countries
Updating the UKâs code for fiscal stability
The 1998 Code for Fiscal Stability sets out the framework within
which UK fiscal policy is now set. While having such a code does
not make it easier for a Government to meet its fiscal objectives, it
may improve the economic credibility of the policy process. To date
the Code has generally worked well, and in any case many of the
Treasuryâs practices exceed the minimum requirements of the Code.
However, improvements could be made in the light of recent
experiences. In particular it would be preferable for less emphasis to
be placed on the precise forecasts for fiscal aggregates and greater
emphasis to be placed on the magnitude of the risks to those
forecasts. Using the projections contained in the March 2004
Budget, and information on the size of errors made in the past, we
estimate that there is now a 60% chance that the Chancellorâs
âgolden ruleâ will be met without further tax increases or spending
cuts. This compares to 74% for the forecast made by the Treasury
12 months earlier. As well as clarifying how cautious forecasts are,
the uncertainty surrounding projections for fiscal aggregates also
has implications for the way in which progress towards any fiscal
rules should be interpreted
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