pension myths - pensions attack

Public sector pensions are “gold-plated”

The average public sector pension in £140 per week, but if the higher paid are discounted, this figure falls to £80 per week. The average pension for a woman working in the Council is £31 per week.

Spending on public sector pensions is unsustainable.

The cost of public sector pensions as a proportion of GDP has peaked and is now falling with the reduction continuing for at least 40 years.

The proposed increase of 3.2% is necessary

The proposal to increase employee pension contributions by 3.2% (£600 for someone earning 20,000 per year) is nothing to do with making pensions more affordable. It’s just a cash grab to help pay for the banking crisis. Increased contributions in addition to pay freezes will lead to higher number of individuals opting out of schemes.

Public sector pensions are simply a cost burden

If we don’t pay up for public sector pensions we will end up spending more on pension credits and other support for the retired. For instance, if the Local Government Pension Scheme did not exist it would cost the taxpayer £2bn per year in increased means-tested benefits and loss of tax revenue.

Public sector pensions are ‘due for reform’

There were wholesale changes to public sector pensions just five years ago -including increased contributions, increasing the retirement age and ensuring the better off paid more. Agreements are already in place so that future cost increases will be covered by changes in employees’ benefits.

Public sector pension schemes currently allow people to retire at 60

The retirement age for new entrants to most public sector pension schemesis now 65. There are exceptions such as police and fire fighters whose work is particularly physical.

We can increase the pension age because we are all living longer

Although average life expectancy is increasing it is happening far more quickly for some than for others. Men in the South East of England live four years longer on average than in Scotland - and the gap is increasing.

The public is paying extra for shortfalls in all pension schemes

Many public sector pension schemes are fully funded. This means that the assets effectively cover the potential liabilities.

The lower paid are being protected from contribution increases

Although contributions will be lower for some, a person earning £16,000 - will pay an extra £200 per year extra, receive less in retirement and retire later. All this in addition to a real terms pay cut of hundreds of pounds for the next three years.

Public sector pensions must be reduced so that we can support private sector pensions

Many private companies, despite making profits, are closing their final salary schemes. This is wrong. Instead of trying to bring public sector schemes down, in a dangerous race to the bottom, we should try to bring private sector schemes up to a decent level. Most Directors of UK companies will be able to retire at 60 while lower paid workers in the private sector, along with their public sector counterparts will not have the choice.