What is a Promise from the Government Worth? Quantifying Political Risk in State and Personal Pension Schemes in the United Kingdom

C-Tier
Journal: Economica
Year: 2008
Volume: 75
Issue: 298
Pages: 342-361

Score contribution per author:

1.005 = (α=2.01 / 1 authors) × 0.5x C-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

There are three key types of political risk facing pension schemes: those induced by demographic, economic, and pure political factors. The state scheme in the United Kingdom has been susceptible to all three types since 1980, with the result that the annual real internal rate of return on the second‐pillar state pension for the average male worker fell from 5.1% to 1.5% over 25 years. The flat‐rate, first‐pillar Basic State Pension has also experienced a fall in its IRR of 3 percentage points as a result of the indexation basis changing from earnings to prices.

Technical Details

RePEc Handle
repec:bla:econom:v:75:y:2008:i:298:p:342-361
Journal Field
General
Author Count
1
Added to Database
2026-01-24