Attitude to Pension and Retirement

Pension Trends

14 April 2008

Chapter 5: Attitudes to retirement and pension planning
Page number
5-2

List of tables and figures
Figure 5.1 Expected age of retirement from main job: by sex, 2006 Working people expecting to retire from main job before 65: by sex and age, 2006 Expected age of retirement from main job: by employment status, 2006 Expected length of retirement: by when likely to retire in relation to state pension age, 2006 Expectations of retirement income, 2006 Views on whether will definitely have enough income to live comfortably: by age, 2006 Expected main sources of retirement income, 2006 Good standard of living today versus saving for retirement, 2006 Options for retirement saving, 2006 Confidence that employers and the government will guarantee income and provide sufficient income in retirement, 2006 Views on risk of private pension linked to stock market: by personal pension status, 2006 How the government should pay for the rising cost of state pensions: by age, 2006 State pension age and working beyond it, 2006

Type of information*
Non-NS

Figure 5.2

5-2

Non-NS

Figure 5.3

5-3

Non-NS

Figure 5.4

5-3

Non-NS

Figure 5.5 Figure 5.6

5-4 5-4

Non-NS Non-NS

Table 5.7

5-5

Non-NS

Figure 5.8

5-5

Non-NS

Figure 5.9 Figure 5.10

5-6 5-7

Non-NS Non-NS

Figure 5.11

5-7

Non-NS

Figure 5.12

5-8

Non-NS

Figure 5.13

5-8

Non-NS

*Type of information NS Non-NS Mixed Information classed as National Statistics Information not classed as National Statistics Mixture of NS and non-NS information

Chapter 5

Attitudes to retirement and pension planning
• In 2006, 33 per cent of working men and 53 per cent of working women in Great Britain expected to retire before 65. • Some 13 per cent of working people were unable to estimate how long they would be in retirement; almost half of those who could do so expected retirement to last at least 20 years. • Almost half of those who had not yet retired in 2006 had no idea of what their retirement income would be; only 10 per cent had a good idea of their retirement income (Figure 5.5). • Of 55 to 64 year olds not yet retired, 44 per cent disagreed with the statement that they would definitely have enough income to live comfortably in retirement (Figure 5.6). • Just under three quarters of people who had not yet retired in 2006 expected their main source of income in retirement to be pension-based (Table 5.7). • Just over one quarter of all individuals thought that paying into an employer pension scheme was the safest way of saving for their retirement; only 9 per cent thought this was the way to make the most of their money (Figure 5.9). • In 2006, over two thirds of all individuals felt that a private pension linked to the stock market was too much of a risk. • Of individuals not yet retired in 2006, 85 per cent said they would be prepared to do some paid work after state pension age if it meant a better standard of living (Figure 5.13).

Chapter 5: Attitudes to retirement and pension planning

Pension Trends

This chapter examines people’s expectations of retirement. It begins by looking at the age at which people expect to retire and how long they expect to be in retirement. It then considers how much income people expect to have in retirement and where they expect it to come from. Finally, it analyses people’s attitudes to saving for retirement and towards choices for the state pension system, particularly in relation to increasing state pension age and working longer. There is much concern about the extent to which people plan -- or fail to plan -- for retirement, and to save accordingly. People often delay pension planning until late in their working lives. According to the British Household Panel survey, the proportion of people who say they are saving specifically for their old age rises steeply when people reach their mid 40s. There are a number of reasons for this delay, which include: • an unwillingness or inability to grapple with complex financial matters surrounding pensions; • a reluctance to deal with uncomfortable notions of retirement and old age; • a perception that retirement is a long way off and planning for it is less pressing than other, more immediate, financial commitments; and • a lack of clarity about what the future may bring and about retirement and retirement income. Attitudes also influence the extent that people save for retirement and the ways they save. Decisions can be affected by whether they have confidence in pensions and other ways of saving for retirement and their approach to risk.

(and 13 per cent of men), while 42 per cent of men expected to retire at 65 (and 30 per cent of women).

Figure

5.1

Expected age of retirement from main job: by sex, 20061
Great Britain Percentages
50

40

Men Women

30

20

10

0 Up to 50–54 49 55 56–59 60 61–64 65 66–69 70 and Don 't over know

1 Respondents are those not retired and in work or waiting to take up work already obtained. Source: Attitudes to Pensions: The 2006 Survey, Department for Work and Pensions

Overall, 33 per cent of men and 53 per cent of women in work or waiting to take up work expected to retire before the age of 65. SPA for women is set to rise from 60 to 65 over the period 2010 to 2020 under the terms of the Pensions Act 1995, so that women in the three youngest age groups in Figure 5.2 will have a SPA of 65.

Expected age of retirement
People’s expectations of when they might retire may not match when they actually do so, but these expectations may affect the decisions they make during their working lives about saving and planning for retirement. Attitudes to

Figure

5.2

Working people1 expecting to retire from main job before 65: by sex and age, 2006
Great Britain Percentages
80 70 60 50 40 30 20 10 0

Pensions: The 2006 Survey (undertaken for the Department for Work and Pensions) found that 21 per cent of people in work or waiting to take up work in Great Britain expected to retire from their main job at age 60. Some 16 per cent of people expected to retire before this age and 53 per cent after this age, with 36 per cent expecting to retire from their main job at 65. A further 9 per cent did not know when they would retire from their main job. The pattern is different for men and women, reflecting the current difference in state pension age (SPA, see Glossary): 65 for men and 60 for women. In both cases, a substantial minority expected to retire from their main job at SPA: Figure 5.1 shows that 31 per cent of women expected to retire at 60

Men Women

16–24

25–34

35–44

45–54

55–64

1 Those not retired and in work or waiting to take up work already obtained. Source: Attitudes to Pensions: The 2006 Survey, Department for Work and Pensions

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Chapter 5: Attitudes to retirement and pension planning

Nevertheless, over half of women in the three youngest age groups in Figure 5.2 (54 per cent) anticipated retiring before 65. This suggests that these women were unaware of the forthcoming change, or if they were aware of it, this did not affect the age at which they planned to retire from their main job. This might be because they expected to rely on private pension income or non-pension income in their retirement to a greater extent than on state pension income, and therefore did not expect their retirement age to be determined by SPA. However, the proportion is lower in the youngest age group: only 29 per cent of women (and 28 per cent of men) in the 16 to 24 age group expected to retire before 65. Trends in employment and retirement are discussed in Chapter 3.

implications for the level of pension and other saving that they need to make to achieve a certain standard of living in retirement. In 2006, 13 per cent of those responding to the Attitudes to

Pensions survey were unable to estimate how long they would be in retirement , but nearly half (49 per cent) of those who did feel able to do so expected retirement to last at least 20 years. Women were more likely than men to expect a retirement of 20 or more years (56 per cent compared with 42 per cent). Some 14 per cent of respondents thought they would be in retirement for less than ten years. The length of retirement people expect to have is linked to
1

In 2006, self-employed people were more likely than employees to expect to continue working later in life. Only 6 per cent of employees expected to work to 70 and over, compared with 16 per cent of the self-employed, and 22 per cent of employees expected to retire at 60 compared with 14 per cent of the self-employed (Figure 5.3). Nearly a quarter (24 per cent) of the self-employed did not know when they would retire compared with just 7 per cent of employees.

the age at which they expected to retire. Individuals expecting to retire before SPA were more likely to anticipate a long retirement, with 29 per cent anticipating a retirement of 20 to 24 years and a further 39 per cent expecting their retirement to be 25 years or longer (Figure 5.4). Only 8 per cent of people retiring before SPA expected their retirement to last nine years or less. Figures on the actual length of retirement of individuals are

Figure

5.3

not available. However, the 2006 UK principal projection of cohort life expectancy (see Glossary) for men aged 65 is 20.8 years, while for women aged 60 it is 28.0 years . Life expectancy varies by gender, social class group, level of deprivation and geographical location (see Chapter 14).
2

Expected age of retirement from main job: by employment status, 20061
Great Britain Percentages
40

Figure
30

5.4

Employees Self-employed

Expected length of retirement: by when likely to retire in relation to state pension age, 20061,2
Great Britain Percentages

20

10

Less than 5 years
0 Up to 50–54 49 55 56–59 60 61–64 65 66–69 70 and Don 't over know

Before SPA
5–9 years 10–14 years

At SPA After SPA

1 Respondents are those not retired and in work or waiting to take up work already obtained. Source: Attitudes to Pensions: The 2006 Survey, Department for Work and Pensions
15–19 years 20–24 years 25 years and over 0 10 20 30 40 50

Expected length of retirement
Length of retirement is determined by life expectancy and the age at which an individual retires from paid work. The longer an individual’s retirement, the longer the period of time their income and wealth, which for most people is accumulated during their working life, must be spread over. This has

1 Respondents are those not retired and in work or waiting to take up work already obtained. 2 Excludes ‘don’t knows’. Source: Attitudes to Pensions: The 2006 Survey, Department for Work and Pensions

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Chapter 5: Attitudes to retirement and pension planning

Pension Trends

Expected levels of retirement income
Most people find it difficult to estimate how much income they will need when they retire. Figure 5.5 shows findings on people’s expectations of retirement income. Almost half of respondents who were not yet retired had no idea what their retirement income would be; and around one fifth had only a vague idea of whether they would have enough to live on. Just under a quarter had a reasonable idea and only 10 per cent had a good idea. This suggests considerable uncertainty for most people. The 2006 Attitudes to pensions survey found that young people were the least likely to have a good idea of their retirement income. For instance, 73 per cent of those in the 18 to 24 age band had no idea what their income in retirement would be, compared with 21 per cent of nonretired respondents in the 55 to 64 age band.

neither agreed nor disagreed, while 11 per cent did not know. This uncertainty diminishes in the older age bands, with three quarters of non-retired people in the 55 to 64 and 65 to 69 age bands expressing definite agreement or disagreement with the statement.

Figure

5.6

Views on whether will definitely have enough income to live comfortably: by age, 20061
Great Britain Years
60 50 40 30 20 10 0

Agree Neither agree or disagree Disagree Don’t know

Figure

5.5

Expectations of retirement income, 20061
Great Britain Percentages
10% I have a good idea of what my retirement income will be I have a reasonable idea of what my retirement income will be I know vaguely whether I will have enough to live or not I have no idea of what my retirement income will be 19%

18-24

25-34

35-44

45-54

55-64

65-69

1 Respondents are those not defined as retired. Source: Attitudes to Pensions: The 2006 Survey, Department for Work and Pensions

24% 47%

Expected sources of income in retirement
Most people who are not yet retired have an idea of what their main source of income in retirement is likely to be: in the 2006 Attitudes to pensions survey, only 4 per cent said they did not know (Table 5.7). Just under three quarters (74 per cent) expected their main source of retirement income to be pension-based, whether from their own state pension (basic state or second tier pension3), from a private pension (occupational, personal or stakeholder), or from a share of pension income from a partner or spouse. Some 30 per cent of individuals expected the basic state pension to be their main source of retirement income. Over one fifth (22 per cent) of individuals did not expect their main source of retirement income to be pension-based. A variety of non-pension income sources were investigated by the Attitudes to pensions survey. It found that 5 per cent of people who had not yet retired thought that their own earnings from paid work would be their main source of retirement income, while 4 per cent thought that they would rely on savings accounts. For 6 per cent of individuals, the main source was expected to be property -- renting property, including sub-letting, and the profits from selling a house and

1 Respondents are those not defined as retired. Source: Attitudes to Pensions: The 2006 Survey, Department for Work and Pensions

Figure 5.6 presents people’s views in 2006 on the statement that they would definitely have enough income to live comfortably in their retirement. Across all age bands, some 20 to 30 per cent of respondents agreed with the statement. The closer individuals were to their retirement, the greater the percentage that disagreed. In the 55 to 64 age band, 44 per cent disagreed, compared with one quarter of 18 to 24 year olds. Thus older people were found to be less confident than younger people that their retirement income would allow them to live comfortably. Young people are also relatively uncertain about whether they will have enough income to live comfortably in retirement. In the younger age bands, many respondents neither agreed nor disagreed with the statement, or didn’t know what they thought. For instance, some 45 per cent of 18 to 24 year olds

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Pension Trends

Chapter 5: Attitudes to retirement and pension planning

moving to somewhere smaller. Only 2 per cent of individuals expected inheritance to provide their main income in retirement. There were some differences between men’s and women’s expectations about their main source of income in retirement, particularly in relation to pension-based income sources. Although percentages expecting to rely mainly on their own basic state pension were similar, 7 per cent of women expected to rely mainly on their partner’s basic state pension, compared with only 1 per cent of men. A larger percentage of men expected their main source of income to be from private occupational pensions (34 per cent, compared with 22 per cent of women) and personal pensions (10 per cent, compared with 6 per cent of women). Meanwhile, 11 per cent of women expected to rely on their partner’s occupational pension, compared with 1 per cent of men, and 3 per cent of women and almost no men expected to rely on their partner’s personal pension.

People on low incomes were the most likely to expect state pensions to be their main source of income in retirement: 59 per cent of those earning under £10,000 a year, 50 per cent of those earning between £10,000 and £19,999 a year and 32 per cent of those earning £20,000 to £28,999 a year expected state pensions to be their main source of income in retirement. Although it might be expected that few people on high incomes would consider themselves likely to depend on state pensions in retirement, the 2006 Attitudes to pensions survey found that 9 per cent of those earning £50,000 and over expected state pensions to be their main source of retirement income. Nevertheless, 69 per cent of those with annual earnings of £50,000 and over expected private pensions to be their main source of income in retirement. This compares with only 18 per cent of those earning under £10,000, 25 per cent of those earning £10,000 to £19,999 and 47 per cent of those earning £20,000 to £28,999 per year.

Table

5.7
1

Attitudes to saving for retirement
Percentages

Expected main sources of retirement income, 2006
Great Britain

Individual attitudes towards spending today or saving for retirement affect the type and extent of retirement saving that people undertake. Figure 5.8 shows the degree of agreement with the statement ‘‘I would rather have a good standard of living today than save for retirement’’ among respondents who were not yet retired.

Own pension Of which: Basic state pension Occupational pension Personal pension Stakeholder pension Partner 's pension Of which: Basic state pension Occupational pension Personal pension Non-pension income Of which: Earnings from paid work Savings accounts Rent from property (including sub-letting) Profit from downsizing home Inheritance Don 't know All sources
1 Respondents are those not defined as retired.

63 26 27 8 1 11 4 6 1 22

Figure

5.8

Good standard of living today versus saving for retirement, 20061
Great Britain Percentages
50

40

5 4 3 3 2 4 100

30

20

10

0 Agree strongly Agree Neither agree nor disagree Disagree Disagree strongly

1 Respondents are those not defined as retired. Source: Attitudes to Pensions: The 2006 Survey, Department for Work and Pensions Source: Attitudes to Pensions: The 2006 Survey, Department for Work and Pensions

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Chapter 5: Attitudes to retirement and pension planning

Pension Trends

Figure

5.9

Options for retirement saving, 20061
Great Britain Percentages

50 40 30 20 10 0 Paying into an employer pension scheme Paying into a Investing in the stock market personal by buying pension stocks and scheme shares Investing in property Saving into an ISA (or other tax-free savings account) Saving into a high rate savings account Buying premium bonds

The safest way to save for retirement The way to make the most of your money

Other (please specify)

Don 't know (or refused)

1 All respondents. Source: Attitudes to Pensions: The 2006 Survey, Department for Work and Pensions

In 2006, 26 per cent of respondents agreed that they would rather have a good standard of living today than save for retirement, and 3 per cent said they agreed strongly. However, 41 per cent of respondents disagreed, suggesting that they were prepared to sacrifice their standard of living today in order to save for retirement; 2 per cent strongly disagreed. A further 28 per cent neither agreed nor disagreed, suggesting ambivalence or uncertainty. The Attitudes to pensions survey found that those on low incomes were the most likely to agree with this statement . All respondents in the 2006 Attitudes to pensions survey were asked about options for retirement saving (Figure 5.9). Respondents were asked to select an option which they thought provided the safest way to save for retirement and an option that would make the most of their money. Over one quarter (26 per cent) of respondents thought that paying into an employer pension scheme was the safest way of saving for their retirement; the same percentage believed that the safest approach was investing in property. Paying into a personal pension scheme was seen as the next safest method of saving for retirement (17 per cent), followed by investing in Individual Savings Accounts (ISAs) or other taxfree savings accounts (15 per cent). The options which were seen as making the most of people’s money were different from the safest options. Almost half (47 per cent) of respondents believed that investing in
4

property was the best approach. Only 9 per cent of respondents saw paying into an employer pension scheme as the way to make the most of their money, and only 6 per cent favoured paying into a personal pension scheme. Investing in ISAs and other tax-free savings accounts was a more popular choice (13 per cent). The popularity of property investment -- believed to be one of the safest options for retirement saving and by far the most profitable choice -- is perhaps unsurprising given the large increases in property prices between the early 1990s and 2006. However, whether such investments will continue to provide good returns in future is uncertain. In the 2006 survey, individuals were also asked how confident they were that their employers and the government would guarantee them an income in retirement; and how confident they were that their employers and the government would provide them with sufficient income in retirement. Figure 5.10 shows that 45 per cent of employees were confident that their employers would guarantee them an income in their retirement, while 37 per cent of respondents were confident that the government would do the same. In terms of delivering a sufficient retirement income, respondents were generally less confident. Only 31 per cent of employees were confident that their employer would deliver a sufficient income for their retirement and 34 per cent were not confident that their employer would provide

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Pension Trends

Chapter 5: Attitudes to retirement and pension planning

enough. Only 14 per cent of respondents were confident that the government would provide them with a sufficient income for their retirement, and 55 per cent were not confident that the government would provide enough. People’s lack of confidence in their employers and in the government to provide them with a sufficient retirement income could help to explain why investing in property was seen as an attractive alternative for saving for retirement in the 2006 survey.

pension. Overall, 68 per cent of respondents felt that a private pension linked to the stock market was too much of a risk.

Figure

5.11

Views on risk of private pension linked to stock market: by personal pension1 status, 20062,3,4
Great Britain Percentages

Figure

5.10

80 70 60 50 40 30 20 10 0 Never had personal pension Has current or past personal pension Has current personal pension

Confidence that employers and the government will guarantee income and provide sufficient income in retirement, 2006
Great Britain Percentages
60

Confident
50 40 30 20 10 0 Your employer (guarantee) 1 Your employer (sufficient) 1 Government (guarantee) 2 Government (sufficient) 2

Neither confident nor unconfident Unconfident
Worth the risk Too much of a risk

1 Personal pensions include stakeholder pensions. 2 All respondents. 3 Responses to statements "A private pension scheme linked to the stock market is worth the risk" and "A private pension scheme linked to the stock market is too much of a risk". 4 Excludes ‘don’t knows’. Source: Attitudes to Pensions: The 2006 Survey, Department for Work and Pensions

1 All current employees. 2 All respondents. Source: Attitudes to Pensions: The 2006 Survey, Department for Work and Pensions

Public attitudes to state pension options
The first report of the Pensions Commission (2004) set out four possible options for changes to ensure the long term survival of the UK pensions system5: 1. 2. 3. 4. pensioners will become poorer relative to the rest of society; or taxes/National Insurance contributions devoted to pensions must rise; or the savings rate must rise; or average retirement ages must rise.

The 2006 Attitudes to pensions survey asked people with and without experience of personal pensions (including stakeholder pensions) for their views on the risk of private pensions linked to the stock market. Figure 5.11 shows the results by personal pension status. In all cases, the majority of respondents felt that private pension schemes linked to the stock market were too much of a risk. However, 43 per cent of those with current personal pensions, which are linked to the stock market, felt that private pension schemes linked to the stock market were worth the risk, compared with only 28 per cent of those who had never had a personal pension. These individuals clearly believed that personal pensions are an attractive method of saving for retirement despite the risks involved. Those who had never had a personal pension were the most likely to see a private pension scheme linked to the stock market as too much of a risk (72 per cent). The question was also asked by employer pension status. The results showed no difference between the views of those with current employer pensions, those with current or past employer pensions and those who had never had an employer

The fourth option provides the rationale behind measures in the Pensions Act 2007 which increase SPA for men and women from 65 to 68 years between 2024 and 20466. This is designed to lead to an increase in the average age of retirement. The third option led to measures in the Pensions Bill 2007 aimed at encouraging greater private saving. These include a duty on employers to automatically enrol eligible employees into a workplace pension scheme, and the establishment of Personal Accounts. The first and second options outlined by the Pensions Commission were seen by the Commission as less desirable.

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Chapter 5: Attitudes to retirement and pension planning

Pension Trends

Figure

5.12

How the government should pay for the rising cost of state pensions: by age, 20061
Great Britain Percentages

100 90 80 70 60 50 40 30 20 10 0 18-34
1 All respondents. Source: Attitudes to Pensions: The 2006 Survey, Department for Work and Pensions

Refused or don 't know

(Spontaneous) Both raise taxes and SPA

Keep things as they are for now, which means the value of the state pension will fall over time Raise the age at which pensioners can receive their state pension so that the value of the state pension does not fall Raise taxes so that the value of the state pension does not fall 35-49 50-69 Total

Figure 5.12 shows the results of investigation by the 2006

likely to be affected by a rise in taxation as they have many years of paying taxes ahead of them, while retirement may seem a long way off; older people might expect to lose less from an increase in taxation and more from an increase in SPA (if it is perceived as applying to them) and from a decrease in the value of state pensions. Figure

Attitudes to pensions survey into people’s attitudes towards these issues. Respondents were asked how the government should pay for the rising cost of state pensions if it had to choose between various options on state pensions, designed to reflect the Pension Commission’s first, second and fourth options. Overall, the survey found that the most popular way of paying for the increased cost of state pensions was to increase taxes so that the value of the state pension did not fall (43 per cent). The second most popular option was to increase SPA so that the value of the state pension did not fall (29 per cent). A significant minority (18 per cent) were happy to see the value of the state pension fall over time. The 2006 survey found important differences related to respondent age. In the 50 to 69 age band, made up of people who are nearing retirement or are already retired, the most popular choice was raising taxes to prevent the value of the state pension from falling (52 per cent), while raising the SPA was favoured by only one quarter of respondents and allowing the value of state pensions to fall over time was seen as acceptable by 13 per cent of respondents. However, in the youngest age band (18 to 34), there was less enthusiasm for raising taxes (31 per cent) and more for increasing SPA (37 per cent) and allowing the value of state pensions to fall over time (22 per cent).

5.13

State pension age and working beyond it, 2006
Great Britain Percentages
100 90 80 70 60 50 40 30 20 10 0 When I reach SPA I 'd do some paid work if it meant a better standard of living 1 With people now living longer on average, it 's right that people should have to work longer 2

Disagree strongly Disagree Neither agree nor disagree Agree Agree strongly

1 Respondents are those not defined as retired. 2 All respondents. Source: Attitudes to Pensions: The 2006 Survey, Department for Work and Pensions

Another area of recent government reform which is closely These differences probably reflect how respondents at different times of life perceive these measures as impacting on them directly: those in the younger age bands would be most related to the increase in SPA, is that which enables people to work later in life: the Employment Equality (Age) Regulations Act 2006. The aim of this legislation is to support extended

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Pension Trends

Chapter 5: Attitudes to retirement and pension planning

working lives, which would contribute to raising the average retirement age. Figure 5.13 shows the attitudes towards working beyond SPA of individuals not defined as retired. In 2006, over two thirds of respondents agreed that they would be prepared to do some paid work after SPA if it meant a better standard of living, and 18 per cent agreed strongly, making a total of 85 per cent in agreement. However, there was much less support for the idea that people should have to work longer to reflect increases in life expectancy, with only 27 per cent of all respondents agreeing and 2 per cent of all respondents agreeing strongly with this proposition. This suggests that although most people may be willing to work beyond SPA to have a better standard of living, the majority would like this to be their decision rather than being obliged to work later in life.

References 1 Estimates of how long people expect to be in retirement are based on responses to questions about when people expect to retire from their main job, and what age they expect to live to (self-perceived life expectancy). 2 These figures come from the 2006-based Period and cohort

expectation of life tables (UK, principal projection), which are available on the Government Actuary’s Department website at: www.gad.gov.uk/Demography%5FData/Life_Tables/period_and_co hort_eol.asp 3 Second tier pensions: the state second pension (S2P) and its predecessor, the State Earnings Related Pension Scheme (SERPS). 4 See Clery, E et al (2007), Chapter 6. 5 Pensions Commission (2004) Pensions: Challenges and Choices;

The First Report of the Pensions Commission (Chapter 1), Her
Majesty’s Stationery Office (HMSO): London. 6 The increase in SPA for both men and women from 65 to 68 between 2024 and 2046 follows the increase to bring women’s SPA into line with that of men between 2010 and 2020 under the Pensions Act 1995, which was discussed earlier in the chapter.

Sources and further reading Clery, E, McKay, S, Phillips, M and Robinson, C (2007) Attitudes to pensions: The 2006 survey, Department for Work and Pensions’ Research Report No. 434. The Employment Equality (Age) Regulations Act 2006, HMSO: London. Hedges, A (1998) Pensions and retirement planning, Department for Social Security Research Report No. 83. McKay, S and Kempson, E (2003) Savings and life events, Department for Work and Pensions Research Report No. 194. Incorporates analysis of the British Household Panel survey. The Pensions Act 1995 (c26), HMSO: London. The Pensions Act 2007 (c22), HMSO: London.

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References: 1 Estimates of how long people expect to be in retirement are based on responses to questions about when people expect to retire from their main job, and what age they expect to live to (self-perceived life expectancy). 2 These figures come from the 2006-based Period and cohort expectation of life tables (UK, principal projection), which are available on the Government Actuary’s Department website at: www.gad.gov.uk/Demography%5FData/Life_Tables/period_and_co hort_eol.asp 3 Second tier pensions: the state second pension (S2P) and its predecessor, the State Earnings Related Pension Scheme (SERPS). 4 See Clery, E et al (2007), Chapter 6. 5 Pensions Commission (2004) Pensions: Challenges and Choices; The First Report of the Pensions Commission (Chapter 1), Her Majesty’s Stationery Office (HMSO): London. 6 The increase in SPA for both men and women from 65 to 68 between 2024 and 2046 follows the increase to bring women’s SPA into line with that of men between 2010 and 2020 under the Pensions Act 1995, which was discussed earlier in the chapter. Sources and further reading Clery, E, McKay, S, Phillips, M and Robinson, C (2007) Attitudes to pensions: The 2006 survey, Department for Work and Pensions’ Research Report No. 434. The Employment Equality (Age) Regulations Act 2006, HMSO: London. Hedges, A (1998) Pensions and retirement planning, Department for Social Security Research Report No. 83. McKay, S and Kempson, E (2003) Savings and life events, Department for Work and Pensions Research Report No. 194. Incorporates analysis of the British Household Panel survey. The Pensions Act 1995 (c26), HMSO: London. The Pensions Act 2007 (c22), HMSO: London. 5-9