Pension privatization in a welfare state environment: socializing private pensions in Germany and the United Kingdom

The interpretation of the move towards privatizing social services in European welfare states is controversial: “surrender of public responsibility” or “welfare ends through market means”? This article argues that the “social” import of private pensions cannot be assessed in isolation; rather it depends on the overall institutional arrangement of old-age security in a country. The “social” regulation of private pensions and the coordination of public and private pensions are identified as crucial variables. Empirically, the article shows that in two countries with different welfare state traditions, Germany and the United Kingdom, new policies of private pensions have transformed the set-up of old-age security. The article also highlights the limits to “social” regulation. In concluding, it shows that the findings reflect wider changes in western welfare states, especially the rise of a regulatory state in social welfare.