Back to the State? The Public Policies of Private and Public Pensions in Britain

Britain, being a liberal or residual welfare state, has always been characterized by a limited role for state pensions and a heavy reliance on private pensions, both occupational and personal.1 Only in the mid 1970s, flat-rate state pensions were expanded by a substantial earnings-related second tier but this came ‘too late’ to be sustainable (Myles and Pierson, 2001). Since then, contributory state pensions have seen significant cutbacks while private provision has been forcefully promoted. Paradoxically, so I argue, the role of the state in British old-age security has not generally declined in the process, but has actually increased. This finding is similar to the ‘(de-)regulation paradox’ familiar from public utilities (see Chapter 2, in this book). In the case of pensions in Britain, the move towards ‘more state’ extends to four aspects.