The Pensions Policy Institute has established a strong reputation within the pension industry, in Government circles and with the media for its independent, evidence-based analysis and comment in the field of pensions and retirement policy. Its research findings are used extensively by Government decision-makers and advisers, other political parties, pension and savings providers, employers and trade unions, academics, commentators and the wider public.
We are always interested in ideas and suggestions for topics for future research and Briefing Notes. Please contact Sarah Luheshi, PPI Deputy Director at email@example.com if you have any ideas and suggestions or wish to discuss any of the work we undertake.
Please read further for more information on the research the PPI is currently and will be conducting over the next year.
Core Research – funded with income from the PPI’s Supporting Membership Scheme
Briefing Notes and Reports
The PPI produces Briefing Notes on topical policy issues – please click here to see our more recent publications. In addition, the PPI will sometimes publish reports on such topics, where they merit a more detailed investigation.
The PPI responds to major Government consultations, Select Committees or other Parliamentary Inquiries on policy on pensions and retirement provision. Please click here to see our more recent submissions.
The Pensions Primer: a guide to the UK pensions system
This guide gives a detailed description of the current UK pensions system. The guide is intended for people wanting to learn about the UK pensions policy framework.
The PPI has produced an updated guide for 2017 reflecting policy changes and benefit uprating announcements. This version of the guide reflects the current position of, and legislated future changes to, the UK pension system as at June 2017. Please click here for the current version.
The PPI maintains a compendium of key facts and statistics on pensions and retirement provision in the UK. The aim is to collate into a single place a range of different statistics on demographic change, key state pension and private pension indicators. Key tables will be updated as new data becomes available. Pensions Facts can be viewed here
Pensions Modelling and Development
The PPI has constructed a suite of micro-simulation models to analyse long-term outcomes from the current UK pensions system and possible reforms. The original development of the models was funded by the Nuffield Foundation.
Each year the PPI conducts a model update exercise in which the latest data are incorporated and the long-term assumptions are reviewed. The models have been designed to allow different types of analysis under different pensions systems:
- The Individual Model projects future state and private pension income for hypothetical individuals with different characteristics.
- The Aggregate Model projects long-term government expenditure on pensions and contracted-out rebates, income from the private pensions system and the fiscal cost of tax relief.
- The Distributional Model projects forward the distribution of pensioner incomes consistently with the Aggregate Model.
- The Dynamic Model uses longitudinal data on people aged over 50 in England (taken from the English Longitudinal Survey of Ageing) to make deterministic projections about future retirement outcomes using a dynamic micro-simulation model.
The models have been developed in recent years: our individual modelling capability has been expanded with a stochastic investment model and the aggregate model can now model public sector and the private sector pension schemes separately. Future developments included improved modelling of retirement decisions and transitions into retirement, including the holding of investments beyond State Pension Age. These recent developments were also funded by the Nuffield Foundation.
DWP Social and Economic Research Framework
The PPI is on the DWP’s Social and Economic Research Framework under the policy areas of Pensions and Ageing. The PPI welcomes contact with regards to collaborative work in these research areas.
The PPI undertakes commissioned research for third party clients provided that the research is:
- Within the PPI’s charitable objective;
- The PPI has the capability and the capacity to undertake the research; and
- The research sponsor or sponsors are happy for the final research to be published.
Sources of Retirement Income - Age UK
There has been a growing focus on differences in trends in living standards between various age groups. The pensioner group has experienced increases to their median income at a faster rate than other age groups with this increase being largely due to new pensioners having a higher income than existing pensioners. Through longitudinal analysis of pensioners it is possible to consider the changing sources of income within the population and answer the following questions:
- · How does dependency upon the State Pension change through retirement for individuals?
- · How does dependency on other state income change through retirement?
- · How has the variability of private sources of income been balanced by stability of income from the state?
Triple lock (Age UK, CfAB and TUC)
A comprehensive analysis of the implications of the ending of the triple lock, investigating, among other things, the impacts on:
- Short term and long term Government spending
- Government spending per pensioner, and per person of working age
- Pensioner poverty
- Levels of means testing in retirement
- The impact on younger generations and the balance between state support and private saving: how much more might individuals need to save, or how much longer might they need to work, to top up the lower State Pension income.
Pensions “Out of the Box” (State Street, LV=, TPP, Hargreaves Landsdown, Scottish Widows)
generally living longer; the 100 year life is increasingly unexceptional. In light of this, is there the need to
rethink what retirement is? What is it
likely to look like in the future? And
in this future world, what is the role of retirement, what is needed in terms
of funding such a period and where does such money come from?
How will the landscape for retirement evolve? (TPR, DWP, FCA, L&G, ABI, AON Hewitt, Prudential, Just, Schroders)
The introduction of the Defined Contribution flexibility reforms in 2015 redefined the way in which individuals use their pension saving throughout retirement. Since April 2015 there has been a sharp reduction in the number of annuities purchased, a significant increase in the use of lump sums, and drawdown products are now used as often as annuities.
Existing PPI research suggests that the experience of the last 2 years is not likely to be fully representative of the future market for post-retirement products. Therefore there is a research gap concerning the future use of, and market for, post-retirement products in the UK. The output will be a series of reports, published during the first half of 2018.
and the Millennials (Standard Life)
How much would an individual saving in a pension throughout their working life be able to save by retirement? The aim of the research would be to highlight the value of persistent long term saving, as well as some of the changes in behaviour that can affect outcomes, and the variability arising from long term investing. This piece of work highlights the issues rather than provide a comprehensive analysis of all of the trade-offs involved.
The PPI will run a small number of individuals through its stochastic model to generate a range of retirement outcomes following three different savings patterns. The stochastic model would generate a range of outcomes for each individual, with the main output being the private pension pot accumulated throughout their working life, shown in today’s earnings terms. The research would identify how these results would change with different behaviours and assumptions, such as: starting to save earlier / later, retiring earlier / later, career breaks, for example.
During the ABI’s work on the Pensions Dashboard, it has
become apparent that it is challenging to determine the figure for the amount
of money in “lost pensions” as there are different figures quoted, based on
different sources (Dormant Assets Commission and DWP, Unclaimed Assets
Register) indicating that there is no consistent approach to defining and
calculating ‘lost’ pensions. The ABI is
keen to get a more accurate handle on the amount of pensions that is currently
The output will be a briefing note covering aspects such as the rules around lost pensions, what is meant by ‘lost’ and an estimation of the range of values based on the different definitions and sources.
Care and State Pension Reforms (CASPeR)
project – Understanding the interactions between state pension and long-term
care reforms in Great Britain (funded by the Nuffield Foundation)
The CASPeR team have been offered the chance of further funding to continue the work so as to input into the possible Green Paper on care reform and then to respond to such a paper with additional analysis and data. To see the previous work on this project, please click here.