‘The trouble with the British is that they want European-level services with US levels of tax.’ This quotation, from Wall Street Journal coverage of the UK General Election of 2001, was used by Howard Glennerster (2003, p 199) to illustrate one of the besetting difficulties facing UK policy makers. The problem is that, in reality, ‘someone has to pay’, as he headlined an early section of his book on Understanding the Finance of Welfare. Pensions policy, and the current debate on how we cope with future pressures on pensions, illustrate both the difficulties associated with what may be unrealistic expectations and the unavoidable choices in working out who pays for a substantial part of the welfare state.

In May 2006, the government published wide-ranging proposals for the long-term reform of Britain's pensions system, hailing them as ‘a radical reform and the most important since Beveridge’ (House of Commons Work and Pensions Committee, 2006, p 10). Some historians demurred. The Fowler reforms of 1988 were similarly described – as have been many other social welfare reforms in the previous 50 years. More to the point, the reforms associated with Barbara Castle that brought in the State Earnings Related Pension Scheme (SERPS) in the late 1970s could justifiably have been described in these terms. What is notable about the latest batch of reforms is that, with one crucial addition – the introduction of a low-cost system of additional funded pension accounts into which people will be automatically enrolled unless they opt out – their main effect is eventually to return the UK's pension system towards a flat-rate state pension system of a kind that would have been completely recognisable by Beveridge or the post-war Attlee government that introduced the reforms based on his proposals.

Nonetheless, the latest reforms do represent one of the most radical social policy changes for a generation, and with all-party backing for their main structure and a wide – if not universal – expert consensus behind them, the prospects currently look promising for their survival for longer than the typical UK pension system of the last quarter century. A key to this will, however, be whether public opinion will ultimately accept the painful realities the reforms crystallise, or whether we slip back to hankering after the hope that someone else will pay.