New research published today by Nest Insight and the University of Bath’s Institute for Policy Research (IPR) shares unique insights into how and why significant shifts with UK Pension Reforms from 1997 – 2015 were achieved and implemented.

Previously private recollections of key actors in the establishment and delivery of recent reforms, including fresh accounts from Tony Blair and Gordon Brown, have been brought together and shared through a ground-breaking series of video interviews and a new report: Pension Reforms in the UK: 1997 to 2015 which also includes new contributions from Secretaries of State and the Pension Commissioners.

The reforms to state and private pensions in the UK initiated in the early 2000s represented a milestone in the history of UK pension provision and are widely seen as a model case study for creating lasting policy change. They included auto-enrolment into workplace pensions, the creation of a single tier, more generous Basic State Pension, and phased increases in the state pension age.

Initiated by the creation of the Turner Commission, these reforms represented a comprehensive overhaul of the UK pension system, delivered across a complex mix of institutions. They were developed and implemented over more than a decade of reform, spanning governments from across the political spectrum whilst also withstanding the impact of the Global Financial Crisis from 2008.

Professor Nick Pearce and Dr Thomais Massala from the University of Bath’s IPR designed and conducted the interviews for the project, and co-authored the report based on the findings of the research. Their research reveals five lessons about the conditions under which the reforms were drawn up and how they were successfully implemented, focusing on:

  • A small, independent, politically astute Pensions Commission, rather than a large Royal Commission type body
  • Continuous political commitment from ministers and high quality analytical, policy and operational support from civil servants
  • A strong and robust evidence base that underpinned a coherent package of key policy proposals
  • A bold sense of direction combined with proactive consensus building
  • Consistency of the reforms with the historical architecture and political economy of the UK welfare state.

Professor Nick Pearce, Director of the University of Bath Institute for Policy Research, explained: “The Turner Commission and the implementation of its recommendations is often considered an exemplary piece of policy reform, and with good reason. The Commission proposed a coherent and comprehensive package of reforms, based on rigorous analytical work, and built a consensus behind its proposals. The reform process was sustained across more than a decade and was taken forward by governments of different political persuasions. It succeeded in large part because it went with the grain of the UK’s welfare state.

“In the aftermath of the financial crisis, pensions systems around the world face significant challenges. The UK's pension system is also under pressure to deliver decent incomes in retirement because of low annuity rates, recent increases in pensioner poverty, and the fact that the self-employed and others working in the gig economy are not covered by auto-enrolment. These significant new pensions policy challenges could not all have been anticipated in the early 2000s, but we can learn much from the Turner Commission when addressing them today.”

Dr Massala, Research Associate at the IPR, added: “This important collaboration between Nest Insight and the IPR has enabled us to conduct in-depth analysis of the significant changes which we’ve seen to the pension system in the UK over recent years.

“By drawing on the expertise and insights of those who were most closely involved in these changes, our hope is that this new research can shine a spotlight on both how and why pension reform was achieved and offer up important lessons to policymakers.”

Will Sandbrook, Executive Director of Nest Insight, said: “The UK Pension Reforms are globally regarded as a case study of how policy should be made. More than 80 per cent of UK workers who are eligible for auto enrolment are now saving for retirement, up from around 50 per cent in 2012. Millions of people will be materially better off in retirement as a result of the reforms.

“With others around the world looking to tackle similar issues, we’re frequently asked at Nest to share our part of the story of how the reforms came to pass. But ours really is just one perspective on a broader story, and at Nest Insight we’ve been thrilled to work on this project with our partners at the University of Bath to capture many of the other perspectives and draw out the lessons that can be learned from them. With calls for a new Pensions Commission, now is a great time to reflect on why this specific set of reforms were so successful and have survived through such a challenging implementation period.”

Find out more about the project