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ONS accounting overhaul set to boost UK savings rates

An overhaul of the UK national accounts is set to boost the official measure of savings rates by including future pension rights as current income, according to reports.

The Office for National Statistics will alter the way it measures the economy by adopting new global accounting standards to gross domestic product and related measures in September, according to the FT.

One of the biggest changes will see future pension rights measured as if they were present income.

Given that the UK has a large funded private sector defined benefit pension system, this will significantly increase the official savings ratio.

In addition, research and development spending will count towards GDP rather than being seen as a cost of production.

The ONS says the accounting change will add between 2.5 per cent and 5 per cent to the official measure of GDP, increasing the total by up to £75bn.

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