2The (old age) dependency ratio is a country’s dependent population expressed as a percentage of its total working-age (aged 15-64) population. According to the World Bank, for the UK this stands at 29.3%, against 14.3% for the world. See: https://data.worldbank.org/
3Having been designed to provide no more than a basic standard of living in retirement, the full single tier state pension has a post-tax replacement ratio of 28.4%, i.e. of pre-retirement income, for the median UK earner. OECD (2019), Pensions at a Glance 2019: OECD and G20 Indicators, OECD Publishing, Paris. p.155.
4The triple lock will be suspended for 2022/23, during which the state pension will be uplifted by the greater of CPI or 2.5%.
5According to the government’s annual Households Below Average Income (HBAI) survey, relative poverty is defined as household income falling below 60% of the median UK household income. To be a pensioner 35 years ago in almost any OECD country typically meant living in relative poverty. However, in the UK, we have moved from a position where, 35 years ago, pensioners were at least three times as likely to be poor as non-pensioners, to one where since 2011 median pensioner incomes now exceed median non-pensioner incomes. Source: OECD (2015), Pensions at a Glance 2015: OECD and G20 indicators, OECD Publishing, Paris. http://dx.doi.org/10.1787/pension_glance-2015-en. Figure 1.3. p.18. That said, the UK has an above average old age poverty rate. This metric defines the percentage of those aged over-65 whose income is below the national median income. The UK’s old age poverty rate stands at 15.3%, against an OECD average of 13.5% and a poverty rate of 11.9% for the UK as a whole. Moreover, a gender pensions gap also exists in this metric with 17.7% of women aged over 65, versus 12.5% of men, caught in the old age poverty trap. The OECD average of 13.5% is split 15.7% for women and 10.3% for men. See: OECD (2019). op.cit.p.187.
6The Ski-Slope of Doom – Is this the most worrying chart in pensions? Sir Steve Webb. LCP. April 2021. Also see: https://www.columbiathreadneedle.co.uk/en/inst/insights/pensions-watch-issue-8/
7In 1909, the old age pension, as it was then known, was paid from age of 70 to anyone whose income was less than £21 per annum, reducing to zero if that income exceeded £31.
8At 30 June 2021.
9According to Pensions Bee, “the self-employed in the UK are the least well-prepared for retirement, and risk being left dangerously exposed to poverty in later life.” See: How does the gig economy affect pensions? Laura Miller. Pensions Bee. 10 December 2019.
12Webb (April 2021). op.cit.
13Persistency rates measure the proportion of people automatically enrolled who contribute regularly into their pension. The DWP tests the proportion of eligible employees contributing into a workplace pension for a period of atleast three out of four years.
14In 2019/20, 42% (up from 40% in 2018/19) of those making regular withdrawals from drawdown or Uncrystallised Fund Pension Lump Sums (UFPLS) withdrew at annual rate of 8% or more and nearly three quarters withdrew ata rate of at least 4%.
15 For example, following a c.30% decline in March 2020, equity markets returned to their pre-pandemic levels in just five months, in contrast to the typical 12/18 month recovery period for previous market downturns of this magnitude.
16In periods of rapid change, i.e. when new information is emerging, typically under conditions of considerable uncertainty, i.e. when that information is difficult to interpret, significant deviation from efficient market pricing is more
likely, as investors attempt to adjust, or adapt, to the new investment environment, i.e. markets conform to the adaptive markets hypothesis.
17See: Pensions Watch editions 6 and 8 at: https://www.columbiathreadneedle.co.uk/en/inst/insights/pensions-watch-issue-6/https://www.columbiathreadneedle.co.uk/en/inst/insights/pensions-watch-issue-8/
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