A hundred years ago, Asquith and Lloyd George brought this country the old age pension and they did it by having the vision, and by having the courage and determination not to back down when the Conservatives insisted that the government couldn’t afford it. A century on and occupational pensions are just as necessary today. We all hope to retire with a pension we can live on, rather than just existing. But most of us aren’t going to get there.
In the public sector the average pension is a mere £7,800 a year, beneath the poverty threshold. The average for women is only half that. There is nothing gold plated about public service pensions. Now more than five million people are being told that the Conservative-led government can’t afford them and are proposing that they move to career average schemes, raise the age that they can retire on it, and link it to the state pension age so that it keeps going up; and cutting their take-home pay by increasing their pension contributions.
All this is on top of the government’s announcement that they were going to switch public sector pension increases to CPI instead of RPI. That move on its own will wipe over £100-billion off their pensions when they retire. £100-billion. The government really hasn’t thought this through. Have they considered the impact it will have on the economic recovery if nearly a quarter of UK households have a pay cut? If 5 million people reduce their spending and increase their retirement saving to compensate that may be enough to slow down the recovery.
It is not true that we can’t afford these pensions. Just like a century ago, the government can afford it, the Tories just don’t want to. They have other priorities like wanting to save rich people from paying the 50p rate of tax. These proposals go too far, they are unfair, this government isn’t listening, and for many people struggling with a pay freeze and spiralling inflation it will force them out of their pension schemes as they cannot afford the pay cut.
And it is wrong to suggest that public sector pensions are unfair to private sector workers. Private sector workers had their pensions savaged by the Labour government but that’s not the fault of ordinary public sector workers. I for one expect the British government to lead by example, to set the highest standards for the way it treats its workforce, and that means safeguarding their pensions.
So yes I believe there is a major crisis in occupational pensions and the government needs to stop trying to make it worse with its proposals for the public sector, and act now to start repairing the damage to private sector pensions".