8 April 2008 Tax reform and retirement saving incentives: take-up of Stakeholder Pensions in the UK by R. Disney † , C. Emmerson* and M. Wakefield* Abstract In April 2001, the UK government introduced Stakeholder Pensions – a new private pension arrangement. The reform also changed the structure of tax-relieved pension contribution ceilings, increasing their generosity for lower-earners. We examine the impact of these changes on private pension coverage using individual level data. We use a difference-in-differences strategy with an estimator that is modified to allow for dichotomous outcomes. Contrary to the conventional wisdom that the Stakeholder Pension reforms had little or no impact on saving behaviour, our results indicate that the change to the contribution ceilings affected private pension coverage rates among lower-earners, especially among women. Key words: Retirement saving pensions tax incentives JEL classification: E21 G23 H24 * Institute for Fiscal Studies, London † Institute for Fiscal Studies, London and University of Nottingham Corresponding author: Disney, School of Economics, Sir Clive Granger Building, University of Nottingham, Nottingham, NG7 2RD, UK. Email: richard.disney@nottingham.ac.uk . Financial support from the ESRC-funded Centre for the Microeconomic Analysis of Public Policy at IFS (grant number M535255111) is gratefully acknowledged. The ESRC Data Archive at Essex made available the Family Resources Survey data used here, and the data are copyright of the Archive. The authors are very grateful to Woojin Chung for assistance with setting up the data used in this paper at an earlier stage of the research project. The authors also thank Erich Battistin, Richard Blundell, Monica Costa Dias, Kevin Milligan and Sarah Smith, and seminar participants at the Centre for Applied Microeconometrics (CAM) at the University of Copenhagen, at FMG at the London School of Economics, at the Institute for Fiscal Studies, the RES Conference 2005, the RTN Economics of Ageing meeting in Paris and the 2007 NBER Summer Institute for useful assistance and comments. Any errors and all opinions expressed are those of the authors.