Tax Reform and Retirement Saving Incentives: Take-Up of Stakeholder Pensions in the UK

21 Pages Posted: 2 Mar 2010

See all articles by Richard F. Disney

Richard F. Disney

University of Nottingham; Institute for Fiscal Studies (IFS); Axia Economics

Carl Emmerson

Institute for Fiscal Studies (IFS)

Matthew Wakefield

affiliation not provided to SSRN

Abstract

In April 2001, the UK government introduced Stakeholder Pensions – a new private pension arrangement. The reform also changed the structure of tax-relieved pension contribution ceilings, increasing their generosity for lower-earners. We examine the impact of these changes on private pension coverage using individual level data. We use a difference-in-differences strategy with an estimator that is modified to allow for dichotomous outcomes. Contrary to the conventional wisdom that the Stakeholder Pension reforms had little or no impact on saving behaviour, our results indicate that the change to the contribution ceilings affected private pension coverage rates among lower-earners, especially among women.

Suggested Citation

Disney, Richard F. and Emmerson, Carl and Wakefield, Matthew, Tax Reform and Retirement Saving Incentives: Take-Up of Stakeholder Pensions in the UK. Economica, Vol. 77, Issue 306, pp. 213-233, April 2010, Available at SSRN: https://ssrn.com/abstract=1562135 or http://dx.doi.org/10.1111/j.1468-0335.2008.00749.x

Richard F. Disney (Contact Author)

University of Nottingham ( email )

School of Economics
Nottingham NG7 2RD
United Kingdom
+44 115 951 5620 (Phone)
+44 115 951 4159 (Fax)

Institute for Fiscal Studies (IFS)

7 Ridgmount Street
London, WC1E 7AE
United Kingdom

Axia Economics ( email )

38 Concanon Road
London SW2 5TA
United Kingdom

Carl Emmerson

Institute for Fiscal Studies (IFS) ( email )

London, WC1E 7AE
United Kingdom
020 7291 4800 (Phone)
020 7323 4780 (Fax)

Matthew Wakefield

affiliation not provided to SSRN

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