Retirement trends in the UK
Giselle Cory
We aren’t saving enough for retirement. This was one of the findings presented in Resolution Foundation’s recent audit of low to middle income households, Squeezed Britain, which showed that a massive 69 per cent of low to middle income households do not have a pension. Across all income groups the proportion failing to save for a pension has fallen over the last decade. This means that working in later life is now more important than ever.
Today, new analysis tells us how we’re doing when it comes to the employment of older workers. It shows that retirement ages - distinct from state pension age (SPA) - are rising. For both men and women, the average age at labour market exit increased by around a year between 2004 and 2010. What remains unclear is whether this is out of choice or necessity.
Tax credit cuts: a false economy
Giselle Cory
This blog originally appeared on Public Finance
If the Chancellor wants to help low to middle income households, he would be wise not to sacrifice tax credits, by far the most progressive way to help poor families
Seventy per cent of April’s new cuts to tax credits will fall on households in the bottom half of the income distribution band if the government goes ahead with proposed changes to working tax credits.
The cuts, announced at various points over the last two years and accounting for over £2.4bn in 2012/13 alone, are by far the biggest cuts to tax credits yet. Of the 2 million people on low to middle incomes currently claiming Working Tax Credits, all will be affected in some way. For some families, individual losses will run to several thousand pounds. Moreover, these cuts will disproportionately impact on households with children, as recently reported on by the IFS.
What works in encouraging saving?
Giselle Cory
This post originally appeared on Left Foot Forward
There are many tricks that can be used to encourage more saving – but we don’t know if any of them work. That is the finding from a new report from the Institute of Fiscal Studies. In looking outside classical economics to understand what drives savings, the authors pinpoint four areas: financial incentives; information, education and training; choice architecture; and social marketing.
If the word “nudge” is going through your head right now, you’d be right: this is the stuff of behavioural economics. Though the lessons from this field of research have been part of policymaking for some time, they have never been more explicitly so than now (see the work of the government’s behavioural insights team).
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