Many public sector workers would receive better pensions under Government proposals

Mary Scanlon MSP, who led the debate at Holyrood this week on public sector pensions, has issued details of how many public sector workers could see their pensions increase by a third or more under the Government proposals.

Mary Scanlon said:

"In five years' time, the United Kingdom is due to spend £33 billion a year on public sector pensions. That is the same as the budget for the Scottish Parliament. Any politician who thinks that the figure can continue to rise must be explicit about where that money will come from.

"There is no doubt about the urgent need for reform against the background of people living much longer than when the funds were set up. Labour's legacy was state spending of £4 for every £3 in revenue, with the UK Government having to borrow £1 in every £4 just to keep the lights on, pensions paid, teachers in schools and doctors and nurses in hospitals.

"That simply cannot continue. As recently as 2nd November the UK coalition Government placed a new offer on the table of an 8 per cent increase in the accrual rate, and it is committed to continue working constructively with unions for a settlement.

"Most public sector workers will see no reduction in the pension that they receive on retirement, with many low and middle-income earners receiving a larger pension income on retirement. Any worker within 10 years of retirement will see no change to the age at which they can retire and no change to the amount of pension they will receive when they retire.

"Even after the reforms, people in the public sector will still have significantly better pensions than those in the private sector with a guaranteed pension that very few in the private sector could ever dream of. Indeed, two thirds of private sector workers are not even members of any pension scheme.

"The taxpayer contributes three times more to civil service employees' pensions than the average private sector employer pays into its employees' pensions. Is it right and fair that private sector employees contribute through taxation to a pension scheme that is far more generous than they could ever dream of?"

A nurse with a salary at retirement of £34,000 would receive a pension of £23,000 if the reforms were introduced; under the current scheme, they would receive £17,000. A teacher with a salary at retirement of £38,000 would receive £25,000 under the proposed scheme; under the current scheme, they would receive £19,000. A hospital porter with a salary at retirement of £14,600 would receive pension benefits of £12,000 under the new scheme, as opposed to £9,000 in the existing scheme.

SOURCE: UK Government Analysis

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