Reports and Briefing Notes

Incentives to save and means-tested benefits

The Government’s latest White Paper, Personal Accounts: a new way to save, sets out more details of how the Government proposes to implement the new Personal Accounts. There has been extensive discussion and debate among stakeholders on the details of the Government’s state and private pension reform proposals. This has included discussion of the impact that reforms are likely to have on individuals, on society as a whole and on existing markets for financial services products.

This paper outlines the incentives to save in Personal Accounts by calculating the internal rate of return that different hypothetical individuals could receive when contributing to a Personal Account. It also considers how the Government's state pension reforms will impact means-tested benefits such as Pension Credit and Savings Credit.

The DWP held a seminar on the Incentives to Save in Personal Accounts on 20 February 2007 in response to requests for further evidence on this issue from members of the Pensions Bill Standing Committee.

To download the the technical appendix, please click here.