The UK government aims to shift the balance between public (Pay-As-You-Go) and private (funded) pensions from 60:40 today to 40:60 by 2050 (UK DSS 1998). What is the economic rationale for this shift? Funding pensions may have a positive effect on economic growth and the long-term sustainability of the public finances, but such a move is only one of a menu of policies capable of achieving these outcomes. It follows that some other ratio between public and private provision would be possible, and there are a range of policy directions open to the government.