Partners in pensions: a problem for the UK financial services industry

There have been concerns across Europe about the cost of state pension provision resulting from increases in the size of the ‘retired’ population. The Labour Government in the UK is in the vanguard of dealing with such pressures, and currently has one of the lowest replacement rates for state benefits in the OECD.

This retrenchment of the state welfare has been accompanied by greater demands upon both individuals and financial services providers. Government has continued to exhort individuals to take greater responsibility to save for their own retirement. Its initiatives place significant demands upon the financial services sector and how it conducts its business. Importantly, they may also have the effect of harming the relationship between consumers of financial services and the financial services industry.

This paper focuses upon efficacy of the UK Government’s policies, and their implications for the financial services sector, particularly in the context of the influence of the ‘Third Way’ approach on UK pension policy.