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 firstname.lastname@example.org 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 2018 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 2018. 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 Sponsored 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.
The Future Life (LV=, State Street, The People's Pension)
People are 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?
The evolving retirement landscape (ABI, Axa IM, DWP, Legal and General, NEST, Prudential, TPR, WEALTH at Work)
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.
Lost Pensions (ABI)
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 unaccounted for.
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.
Default Investment Strategies (AB)
This Briefing note looks at how well the objectives, beliefs and constraints of pension schemes’ default investment strategies meet the needs of a diverse membership. Objectives influence how assets are managed and invested and whether default investment strategies are evaluated as delivering value for money. Therefore, a well-structured and transparent approach to the process of setting the default strategy objectives will be a key driver in whether DC plans deliver value for members over the long term.
Environmental, Social and Governance Investing (Redington)
Recent years have seen growth in the environmental, social and governance (ESG) investment market. Most of the banks and asset managers now have departments and divisions addressing Responsible Investment, and boutique firms specialising in advising and consulting in this area have increased in numbers. The output will be a short report looking at the topic of ESG, specifically in the pensions arena, covering aspects such as its history, glossary of terms, legal and regulatory requirements, adoption of such principles by pension schemes, whether ESG impacts upon charges and fund performance and what barriers may exist to its implementation.
The Future Book 2018 (Columbia Threadneedle Investments)
This is the annual PPI research publication, in association with Columbia Threadneedle Investments, which provides a regular update on the DC and automatic enrolment landscape with a focus on the number of members saving into DC, their level of contributions and DC assets, and how their assets are being invested. The 2018 report builds on the three previous reports (2015, 2016 and 2017), providing a ‘one-stop shop’ for those looking for key information on DC, as well as highlighting trends and developments in the market and DC investment landscape.
International Fund Charges Comparison (Which?)
Fund management charges are generally compared nationally in order to assess whether they are reasonable. However, comparing internationally could help further contextualise UK charges and allow analysis of whether, on a global level, UK charges are high or low, transparent and offer good returns.
This report would consider the range of pension fund management charges in a select number of other countries, an analysis of what is included in the charges of different schemes and how transparent such charges are. Where possible, an assessment of the relationship between charges and performance would be made, so that “return” is correctly identified. As a result of the analysis how do UK charges compare to those of other countries? Are there particular lessons which can be learned from how international pension funds charge that would be relevant in the UK? Are there ways that UK funds could alter their practices which would lead to lower charging without affecting their offering?
Illiquids and Alternatives (BlackRock)
Following the lead of internationally established DC systems, it is suggested that more creative ways need to be found in the UK to facilitate investment in classes such as alternatives and illiquid assets alongside implementing a sustainable investing approach to better invest, improve and protect members’ outcomes for the future. This research and analysis would consider whether default funds would benefit from being able to change their investment strategies to include alternative and illiquid investment classes, what the likely barriers could be to achieving this, and how might they be overcome and the likely trade-off between scale, charges and accessibility.
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.