The United Kingdom State Pension System: Analysis of Proposed Reforms and the Viability of Immigration-Based Policies in Response to Demographic Ageing

Publisher： Cambridge University Press

E-ISSN： 1748-5002|2|2|233-270

ISSN： 1748-4995

Source： Annals of Actuarial Science, Vol.2, Iss.2, 2007-09, pp. : 233-270

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Abstract

This paper briefly examines the options for reform proposed by the Pensions Commission in 2004 to sustain the United Kingdom state pension system in response to an ageing population. It further explores, under various scenarios, the long-term viability of immigration as an alternative policy response, by developing a population projection model to determine the replacement migration levels which would be required to maintain contributions (taxes) at current levels, using population data and assumptions in the public domain. The economic and social implications of immigration-based policies are also considered. This paper does not consider the specific policy recommendations in the Commission's Second Report published in autumn 2005, which at the time of writing was undergoing an internal consultation process.