The Regulatory Welfare State in Pension Markets: Mitigating High Charges for Low Income Savers in the United Kingdom and Israel

Journal of Social Policy, Forthcoming

31 Pages Posted: 13 May 2016 Last revised: 13 Jul 2016

See all articles by Avishai Benish

Avishai Benish

Hebrew University of Jerusalem - The Baerwald School of Social Work and Social Welfare

Hanan Haber

London School of Economics & Political Science (LSE) - Department of Government

Rotem Eliahou

The Hebrew University of Jerusalem - Graduate of Integrative Program: Philosophy, Economics, Political Science

Date Written: May 13, 2016

Abstract

How does the rising ‘regulatory welfare state’ address social policy concerns in pension markets? This study examines this question by comparing the regulatory responses to high charges paid by low-income workers in pension markets in the UK and Israel. In the UK, with the recognition that the market would not cater to low income workers, the regulatory response was the creation of a publicly operated low-cost pension fund (NEST), a ‘public option’ within the market. This allowed low income workers access to a low level of charges, previously reserved for high income and organized workers. In Israel, regulation sought to empower consumers, whilst providing minimal social protection by capping pension charges at a relatively high level, thereby leaving most of the responsibility for reducing the charges with the individual saver. By comparing these two cases, the article develops an analytical framework for the study of the regulatory welfare state, making two contributions. First, it highlights different types of regulatory citizenship: minimal regulatory social protection as opposed to a more egalitarian approach. Second, it identifies an overlooked regulatory welfare state strategy: creating ‘public option’ arrangements, whereby a state-run (but not funded) service operates within the market.

Keywords: Regulatory state, Welfare State, Privatisation, Pensions, NEST

Suggested Citation

Benish, Avishai and Haber, Hanan and Eliahou, Rotem, The Regulatory Welfare State in Pension Markets: Mitigating High Charges for Low Income Savers in the United Kingdom and Israel (May 13, 2016). Journal of Social Policy, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2779475

Avishai Benish (Contact Author)

Hebrew University of Jerusalem - The Baerwald School of Social Work and Social Welfare ( email )

Jerusalem
Israel

Hanan Haber

London School of Economics & Political Science (LSE) - Department of Government ( email )

United Kingdom

Rotem Eliahou

The Hebrew University of Jerusalem - Graduate of Integrative Program: Philosophy, Economics, Political Science ( email )

Mount Scopus
Jerusalem, IL Jerusalem 91905
Israel

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