Old-Age Provision and Homeownership – Fiscal Incentives and Other Public Policy Options M. Eckardt, J. Dötsch, & S. Okruch (eds) Springer International Publishing, 2018

Abstract

Due to an ageing population, a larger and larger share of individuals in Europe and across the developed world will come to depend on retirement income, placing significant pressure on publicly funded pensions. As a result, discussion of retirement policy now includes not only public pensions, but private and occupational pensions and housing as forms of retirement saving and sources of retirement income. However, little is known about how public pensions (both publicly funded and contributory pensions), occupational and private pensions and housing interact. Retirement policy outcomes, in terms of income adequacy, equity and fiscal sustainability, will depend on the economic and behavioural relationships between these three potential sources of retirement income and the diverse policy and institutional contexts within countries. This book provides insight into the policy and institutional context across Europe by collecting eight papers, six of which are country case studies of Germany, Hungary, Ireland, Italy, the Netherlands and the United Kingdom (UK). The book is structured in four parts. Part I consists of two papers and overviews pensions and homeownership across Europe. Part II focuses on case-studies of countries with high homeownership and well-developed private and/or occupational pension markets (Ireland, the Netherlands and the UK), part III collects case-studies on countries with high-home ownership rates yet under-developed private and occupational pension systems (Hungary and Italy) and part IV gives a case study of Germany, with low home-ownership and an under-developed private and occupational pension system. Each case study details the historical trends and policy and institutional state of play regarding public pensions, occupational and private pensions and the housing and mortgage market. The first paper in part I by Eckardt summarizes data on household asset allocation, and it is striking to see the high levels of housing assets as a proportion of household wealth, with housing assets accounting for approximately 80% of household wealth across Europe. While housing as a share of household assets is consistent across Europe, there is diversity in the proportion of people owning a house, participation rates in mortgages and the age profile of homeownership, suggesting how differences in policies and social context may shape the distribution of housing and mortgaging behaviour. The high levels of housing assets in household balance sheets along with the dual role that housing can play – a form of shelter and a store of wealth for retirement – points to why housing is an important consideration for retirement policy making. However, Eckardt argues that little is known about the economic interaction between housing and pensions. In particular, whether housing substitutes or complements pension saving remains a question open to further research. In the second paper of part I, Megyeri analyses the relationship between old age poverty and oldage home-ownership in Europe. The paper shows the risk of old age poverty is higher amongst singleperson households, women and those above 75 years of age. While the risk of poverty amongst homeowners is lower, it is surprisingly only slightly lower (13% amongst homeowners compared to 13.8%