The narrative of the growth of occupational pensions in the previous five chapters has shown the twentieth-century development of the system to be driven by three powerful forces: the desire for old age saving, becoming more insistent with increased longevity and greatly reinforced in recent decades by the tax advantages of pension saving; the political drive for adequate pensioning, defined originally in terms of poverty relief but ending with comprehensive income replacement objectives; and the evolving nature of the employment relationship in large bureaucratic enterprises. The latter was a major factor in the early growth of pension schemes, but the tax benefits of pension saving and the conditions for contracting out of the state pension scheme have more recently made the advantages of schemes less exclusive to large employers (and in some respects less attractive to any employer) than they were in earlier decades. The focus of the first part of this book has been on the interplay of these three forces and their impact on the growing coverage of occupational pension schemes, particularly in the private sector.

Behind contemporary man's age-old fears of personal ageing, behind the anger of social critics at our treatment of the old, or behind the sociologist's analysis of the decay of family mutuality, there often lies a mental image of the golden age past. In this picture, much favoured by politicians and the media, the old were revered; their wisdom and experience were shared with youth; family hearths extended generous welcomes to grandmothers and grandfathers; and, in rural society, especially, family support and household production enabled the old to adapt to increasing infirmity with dignity and at their own pace. In recent years, historians have been able to show that such rose-coloured views of old age in the world we have lost are largely myth. Over twentieth-century lifetimes, our typical experience of old age and our ideas about retirement have both undergone profound changes, and they are not uniformly happy innovations. If we are to analyse them, it will be as well to start off with an understanding of the social and economic experience of old age in the society which gave birth to them, rather than with myths of lost joys and innocence.

Pessimism about old age is not, of course, new. As long ago as 1776, Adam Smith was bemoaning the decline in respect for the old and observing that advanced nations treated their aged citizens badly.

In the 1980s, the return of mass unemployment on a level not experienced since the 1930s, and the radicalization of politics on both right and left, have changed the focus of the pension debate. Many employees once in pension schemes have been thrown out of both schemes and jobs, with early retirement on pension sometimes used as a means of alleviating the resulting hardship. Between 1979 and 1983, membership of occupational pension schemes declined from 11.8 million to 10.9 million: roughly in line with the fall in employment. The percentage coverage among those full-time employees retaining jobs has remained roughly constant. The coverage of full-time women employees has increased to the same level as that for men, and the coverage of the ‘core’ work force has shown no signs of receding. More than three-quarters of males over the age of twenty-five are now in occupational pension schemes. Moreover, with improved vesting of pension rights, those who did not maintain stable employment patterns will still accumulate pension rights. Whereas barely a third of retirees drew occupational pensions before compulsory vesting, this proportion is rapidly rising to two-thirds and over. Moreover, women, who form the majority of the old, are now increasingly benefiting from their husbands' schemes through the spread of widows' pensions.

The friendly societies and trade unions had been reconciled to the insurance legislation of 1911, which provided protection against unemployment and sickness, by being designated ‘approved societies’, authorized to receive and channel contributions from members to achieve the protection designated by the Act. They had generally welcomed the earlier non-contributory pensions as lightening the burden of old age sickness and unemployment payments they had to make. However, in 1925, when contributory national insurance was extended to cover old age, the trade unions and friendly societies did not actively seek a role as a channel, and it was not offered to them. They had effectively accepted that the provision of a minimum income in old age was the business of the state. Their members now readily acquiesced in this, looking to these traditional working-class savings institutions less and less for basic protection in old age. For many decades, small numbers of the old continued to retire with benefits from trade unions and friendly societies, but it was more and more difficult for these institutions to persuade their members to subscribe for these purposes.

Government policy has, understandably, been a major preoccupation of the pensions interests in the post-war decades. Both the tax regime and contracting-out provisions for the earnings-related state pensions had profound effects on the coverage and shape of occupational pension schemes in that period. But the pensions institutions and the market for old age savings also had a dynamic of their own. Changes in the employment relationship, with further growth of large-scale, bureaucratic organizations and labour shortages under full employment conditions, increased the demand for pensions from both employers and employees. In the 1960s and 1970s more than a million employees were transferred from the private to the public sector, where employees were more likely to demand and get pension coverage. In private industry, too, a wave of mergers created substantially larger organizations, and this usually resulted in the adoption of pensioning in parts of the organization where it had not existed before. As the size of the pensions market expanded, other financial institutions joined the insurance companies, competing for what was becoming a rapidly growing sector of the market for personal savings.

Until the twentieth century was well advanced, British government departments knew very little (and, in general, did not want to know more) about occupational pension schemes. Early proposals to undertake a survey of private sector pension schemes were for nearly three decades shunted from ministry to ministry until finally the Ministry of Labour undertook the first comprehensive survey in 1936. The concerns of the Government Actuary's Department (established in 1919) were mainly confined to national insurance matters and public sector pensions. Pension schemes were, of course, affected by legislation, but its impact for the first four decades of the century had been slight. The 1927 Validation Act, for example, brought several hundred funds into the purview of the Registrar of Friendly Societies, when they wished exemption from the law against perpetuities. Parliament laid down certain minimal conditions for such approval: for example, that registered pension funds could not invest in the employing firm unless the loan were properly secured and the firm had a good dividend record. Most funds did not, however, bother to register, and lawyers devised other, simpler means of avoiding the law against perpetuities, advising that by the time any disadvantages emerged, the law would be changed.