This report presents the findings of a review of literature relevant to assessing the impact of the workplace pension reforms on household savings in the UK. It updates and supplements a previous review carried out in 2006 by PricewaterhouseCoopers (DWP research report 373).
The amount of additional saving that will occur is important because it bears upon 1 of the key aims of the Workplace Pension reforms - to increase people’s saving for retirement. However people may reduce other forms of household saving to pay new workplace pension contributions, offsetting the overall saving increase. The review looks at the extent to which this has happened in other countries.
The review was carried out in-house by DWP analysts from the Workplace Pension Reform evaluation team. It covers the UK and relevant international research from the OECD (principally the USA, Australia, New Zealand, Germany and Denmark), Latin America and Asia.
Overall the supplementary review supports the 2006 review finding that increasing membership in pension schemes, particularly those in which employers make contributions, can generate new saving. It also finds that estimates of the likely offset in savings vary greatly between different studies and countries owing to limitations in the robustness and comparability of available information.