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Inclusion or insurance?
— National Insurance and the future of the contributory principle | | Author(s) | John Hills |
| Corporate Author | ESRC Centre for Analysis of Social Exclusion - CASE, Suntory-Toyota International Centres for Economics and Related Disciplines - STICERD, London School of Economics and Political Science |
| Publisher | STICERD, London, 2003 |
| Pages | 31 pp (CASEpaper 68) |
| Source | Centre for Analysis of Social Exclusion, London School of Economics, Houghton Street, London WC2A 2AE. |
| Keywords | National insurance contributions ; Pensions ; Social policy. |
| Annotation | The decline of National Insurance (NI) in the UK - as witnessed by its declining share of all social security spending and steady dilution of its original "contributory principle" - is not an accident. Whereas governments of the Left have argued in favour of inclusion, governments of the Right have emphasised focusing limited resources on the poorest through means-testing. Given where we are now, the strong arguments in principle for social insurance look much weaker. However, reasons why the system has not been swept away include the way in which the bulk of the system relates to state pension rights already accrued. The paper explores plans for the future development of state pensions, arguing that their combined effect is to restore something like a flat rate state pension, but with significant complexity. A more transparent system could be developed that guarantees a total state pension at a fixed percentage of average earnings for those meeting a participation test, rather than being based on contribution records. This leaves a choice for the remaining sixth of NI benefits to separate out state pensions and absorb other benefits within the rest of working age social security, or to maintain the scope of NI, but also based on participation, not past contributions. (RH). |
| Accession Number | CPA-030625208 B |
| Classmark | JBC: JJ: TM2 |
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| ...from the Ageinfo database published by Centre for Policy on Ageing. |
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