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UK annuity rates and pension replacement ratios 1957-2002

Cannon, Edmund and Tonks, Ian (2003) UK annuity rates and pension replacement ratios 1957-2002. Discussion paper: UBS Pensions Series 008, 444. Financial Markets Group, London School of Economics and Political Science, London, UK.

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Abstract

This paper constructs a time series of annuity rates in the UK for 1957-2002, and examines the pricing of UK annuities, and the relationship between the accumulation and decumulation phases of a defined contribution pension scheme by focusing on the properties of the pension replacement ratio. Using data on annuity returns and the returns on other financial assets, the paper simulates replacement ratios, to build up a frequency distribution of the pension replacement ratio for a UK individual. These frequency distributions illustrate the risk in the pension replacement ratio faced by an individual who saves in a typical defined contribution pension scheme.

Item Type: Monograph (Discussion Paper)
Official URL: http://fmg.lse.ac.uk
Additional Information: © 2003 The Authors
Library of Congress subject classification: H Social Sciences > HB Economic Theory
Journal of Economic Literature Classification System: E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy Formation, Macroeconomic Aspects of Public Finance, Macroeconomic Policy, and General Outlook > E62 - Fiscal Policy; Public Expenditures, Investment, and Finance; Taxation
G - Financial Economics > G1 - General Financial Markets > G14 - Information and Market Efficiency; Event Studies
H - Public Economics > H5 - National Government Expenditures and Related Policies > H55 - Social Security and Public Pensions
Sets: Research centres and groups > Financial Markets Group (FMG)
Collections > Economists Online
Collections > LSE Financial Markets Group (FMG) Working Papers
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Identification Number: 444
Date Deposited: 12 Aug 2009 11:38
URL: http://eprints.lse.ac.uk/24832/

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