Why Cameron’s right on public sector pensions
The claim
“I can look you in the eye and say public service pensions will remain among the very best… much better, indeed, than for many private sector workers. ”
David Cameron, 28 June 2011
Cathy Newman checks it out
The Prime Minister struck a conciliatory tone on public sector pensions today. In a speech to local government bosses, he said his reforms were “fair” no fewer than ten times.
But millions of public sector employees feel a deep sense of injustice about being asked to retire later and contribute more to their pensions. They’ve always argued they deserve a cushier retirement, because they’ve made salary sacrifices throughout their careers.
Does this remain the case though, or do public servants no longer deserve special treatment on their pensions now they’re by and large better paid? We’ve been perusing the pensions debate.
The analysis
In his speech to the Local Government Association, the Prime Minister claimed the Government’s proposals, based on recommendations made by the former Labour Pensions Secretary , Lord Hutton of Furness, were necessary, fairer to the taxpayer, and fairer to public sector workers too.
The Coalition wants public sector workers to pay more and retire later. Ministers also want to replace current schemes based on workers’ final salaries with one based on career average earnings.
The question of whether state-sponsored pension schemes will still outperform their private sector equivalents may well turn out to be a key factor in whether the strikes attract the sympathy of people who work for private companies.
Public sector workers have traditionally argued that what their opponents call “gold-plated” pensions make up for lower salaries.
The Office of National Statistics shows that, in fact, average pay is higher in the public sector. The latest figures from the Annual Survey of Hours and Earnings puts the median average gross salary of a public sector worker at £13.54 an hour (£446 a week).
The comparable figures for the private sector are £10.06 an hour (£388 a week), although the comparison comes with some caveats: there are likely to be significant regional variations, and of course it’s difficult to find jobs in each sector that are exactly comparable, since many private sector roles have no direct equivalent in public services.
What about the average pensions workers from each sector can expect?
As FactCheck reported before, this is where the business of making a fair comparison gets difficult.
According to figures from Lord Hutton’s report, the average public sector pension payout is around £7,800, or £5,600 as expressed as a median payout.
The unions have gone to great lengths to point out that many lower-paid workers will get substantially less than this, but they don’t dispute the overall figure.
How do we find a comparable figure for the private sector? The problem is that there are broadly two kinds of pensions: defined contribution (DC), where the pension payment depends on the pot accumulated by the person when they retire, and defined benefit (DB), where the level of final pension is fixed.
DB pensions, which are similar to the current public sector model, have tended to be much more generous and depend on a higher contribution from employers.
According to ONS figures, the percentage of salary paid into the pot by the average employer was almost three times bigger for DB pensions in 2008.
That’s probably the reason why very few employers still offer DB pension schemes as part of their pay and benefits packages.
In fact, as a new employee of a private company, your chances of getting enrolled on that kind of scheme are “nil”, according to the National Association of Pension Funds (NAPF).
NAPF figures from last year show that the mean annual average value of a DB pension was £7,467 – very slightly less than the public sector average. (The median payout was also very close at £5,860.)
But the average private employee entering work now cannot hope to get anything like as good a deal, according to NAPF. They put the average lump sum a newcomer to the world of work will acrrue in a DC pension at around £20,000, giving an annual salary of just £1,400.
A private sector worker in a DC pension would have to build up a pot of around £200,000 – ten times the current estimated average – to get an annuity in the region of £7,800 a year.
It’s the generosity of employer contributions in the public sector that will still make it a more generous package, according to many experts, even if the Government’s proposals are implemented.
ONS figures suggest that private employers contribute around six per cent on average to DC schemes. Accountants PricewaterhouseCoopers have estimated that the figure would have to rise to more than 30 per cent if a private employer wanted to match a current public sector pension.
And the generosity would continue if Lord Hutton’s recommendations were adopted in full.
While he’s proposed a cap on contributions from the taxpayer, he’s also proposed a floor for pension levels, saying that public service schemes, along with a full state pension, should add up to “at least adequate levels of income”, as defined by the 2004 Turner Commission into pensions.
According to that model, an adequate retirement income for someone earning the average public sector annual salary of just over £23,000 would be £15,538.
Strip out the state pension at the universal £140-a-week ministers say they want to implement and that leaves just over £8,200 which will have to be met by a public service pension scheme.
Cathy Newman’s verdict
You can see why the Prime Minister isn’t going to budge on public sector pensions. Private sector employees are now so much worse off in their retirement – and on average their salaries are no longer any higher.
Faced with those figures, David Cameron knows that most voters who don’t work for the state will back him on pensions reform.
Tonight I asked Mary Bousted, General Secretary of the Association of Teachers and Lecturers, what she thought of FactCheck’s figures. She said Ministers were trying to create a “race to the bottom” and that instead, private sector pensioners should enjoy the same retirement income as their public sector colleagues.
In less austere times, that might be worth debating. As it is, though, with the country struggling to pay off the deficit and householders fighting to make ends meet, it’s somewhat fanciful.
The analysis by Patrick Worrall
There are 173 comments on this post
I think you have to look at the type of qualifications and training that public sector workers have compared to private sector employees.
There is also the possibility to compare NHS nurses and private nurses, state school teachers and those in private schools, council lawyers with lawyers working in partnerships and so on.
Private sector employers have removed defined benefit schemes from NEW employees. The govt are trying to reduce payouts for existing employees, some of whom are very close to retirement.
Also it would be good to see how long public sector workers survive on average after retirement compared to the equivalent workers in the private sector.
Why is no one pointing out the huge pensions MPs receive? Why no reform there?
I work in the private sector and am 23 years away from retirement.
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Superbly put. I can’t believe everyone has completely missed your first point-that is the notion that many public sector workers have to spend 4 years at University (namely teachers).
I’m seriously considering withdrawing my teacher pension this September and quitting next year after only 5 years in the game.
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Quick everyone, become a teacher! Apparently statistics show you earn a fortune, have a great pension, and don’t have to do any work. I cannot understand why it is so difficult to employ Mathematicians in my department – where are you all? Why aren’t you applying in your droves? Why are all the journalists still working for Channel 4 – Private sector pay is apparently terrible. Perhaps “lies, damned lies and statistics” is true after all?
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I am A DT TECHNICIAN AT A HIGH SCHOOL.I DONT GET PAID FOR THE SCHOOL HOLS AND I EARN 13000 POUNDS PER YEAR.I HELP THE TEACHERS AND STUDENTS ALIKE BUT NOBODY IS FIGHTING TO HAVE MY SALARY INCREASED.
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I’d hate to be a pupil of yours, you clearly fail to understand the argument here!
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Are the mathmaticians you mention the ones who send far too many of our children out into the world semi numerate. Or if they get to uni we are told need work on the basics before being ready for their course!Many teachers need to look to their own performances before complaining about their salaries. I know they are busy marking books now they are into their hols, and will be for the next 6 weeks!!
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Just think you lucky teachers _ you have all those months off in which YOU CAN CHOOSE whether to sit around & twiddle your thumbs or whether to get out & look for a part time job, do gardening work for old people, volunteer, set up private teaching to help kids who are struggling, get bar work, try something different to “round off” your abilities & expand your horizons from school. they say teachers never grow up – they go from school to college to university then back to school without ever experiencing the real world. go on…. push the boat out – don’t wait for someone to hold your hand all your life – start your own little business, you never know – you might like it!! be warned though – it is hard work . with no-one to cry to if it is struggling or it fails….
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The trouble is all these figures are predicated on current average wage levels rather than average wages accrued over a career in each sector. At present, because we’re in a recession private sector wages are low, but public sector workers who have been in post for more than 15 years will have earnt less on average over the course of their career. If we ever manage to get a recovery going and private sector wages recover, are public sector wages and pensions going to be increased in line with them? I’m not holding my breath.
I’d also be interested to know how the viability of pension schemes was affected by the employers taking contribution holidays in the good times.
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The Pension holidays were taken for tax reasons. There was a limit to tax relief based on the pension pot. If the pension pots were too large the tax relief was lost.
Governments talk with forked tongue on pensions. “People must save more for their retirement” But at every opportunity the government takes a bite out of the savings cherry. This present coalition shows no sign of forgoing Gordon Browns extra annual tax on pension funds.
As an aside, here in Ireland, part of the repayment is to met by taking over 3 years a percentage of the pot from pension fund, which really is swiping some of the pension holders savings, not based on interest earned but on the capital in the pot! But the government says people must save more for their retirement.
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Dear Factcheck,
It seems you are falling into the government trap. The government says that the current public sector pensions set-up is unsustainable.
Maybe you should research that and then ask why the projected burden is due to fall?
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Why’s it fanciful? If the UK government can waste £70 billion on Trident and £120 billion on tax evasion, avoidance and non-payment, it can cover the cost of bolstering the pension system.
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But at the same time, public sector workers are having paycuts which will affect pensions as well. YOU are running the sstories about Southampton where staff face massive paycuts, freeze on increments, reductions in car allowances and colleague redundancies.
It is all in the same frame and Ed M has done nothing to help
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Why is there noone raising the amount private sector pensioners lose due to the high level of charges imposed on UK pension funds?
There are reports that private pension providers can reduce the pension pot by up to 80% through fees, charges and commissions. A Dutch investor can receive up to 50% more than a British investor for the same investment.
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I wonder how many in the private sector also pay to park at work, in my university charges are now over £300 per year to rise again next year and the local council is now £500. the Uni pays no overtime for evening or weekend work, no company cars, no bonus at the end of the year i use my own mobile and laptop for work. there are many hidden costs and benefits between sectors that should be taken into account
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And probably many more of which you are not aware that would support the argument that the private sector is the poor relative and has been for many years .An earlier comment suggested that the differential favouring the public sector was only of recent origin .10,15 ,20 years ? I suggest those figures would be closer to the mark.Having been in local governent for 33 years I have watched one technique applied after another by LG unions to maintain parity eg comparability awards ,job evaluation schemes (as long as they suit)etc And now because they are are always subject to the market ,private sector employees are seriously struggling in many millions of households .I hold no brief for the antics of the City or our Banks in this I should point out
Your submission proves nothing but at least you did not claim to be objective
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As if everyone in the private sector has a company car, mobile, gets paid overtime and receives a bonus each year! Have you been living on the moon for the last 20 years?
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Would the conclusions be the same if you looked at the earn ins of representative workers with a twenty year dataset? My memory is that twenty years ago public sector wages were much lower and therefore accued pensions are now lower even if the balance is changing
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You want to check my pay & pension ..no pay rise for the last 2 years & 3 fold increase in my pension contributions for the next 3 years. don’t tar all public workers with the same brush. If I need to pay more then thats fine. just give me a decent salary from which to pay more. The government cant have it both ways.
We are not on great big salaries , on massive pensions and we do actually provide some important services.
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From my own unfortunate experience having worked in conjunction with public sector workers is that there has always been too many of them employed relative to the work requirement. If I needed an answer for a fairly strait forward query the relevant person was invariably on’leave’… again! Or it took far too long for an answer to be found. In the private sector of construction were I worked time was of the essance as money doesn’t drop from trees. Whereas in the puplic sector it was only tax payers money, so what’s the urgency!
Since my escape from having to interact with the any ‘time will do’ brigade, slumbering in council offices, I understand there are amazing unbelievable named jobs advertized in various papers and journals, including of course the Guardian. Most of this unnecessary recrutment was encouraged by the last government,partly to prop up employment figures, and part on the basis that working in the public sector acts as a recruiment sergeant for the Labour Party.
After all the debate regarding private/public conditions, the truth is we have too big State sector which is unsupportable long term with a pension commitment unaffordable in it’s present form
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Oh dear. I am afraid you dont get very far with the case for your facts. The thing about the average pensions in the public sector is that they are driven by the high average level of qualifications in for example, the teaching force. The crude average says nothing about the different pension schemes in the public sector and career earnings and pension entitlements. To see Cathy Newman on C4 news this evening trotting out the line on average pensions in the public and private sector was decidedly tendentious on the day when this was David Cameron’s preferred line of argument. Some critical distance from the briefings provided would be very much appreciated.
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You keep talking about taxpayers as though public sector workers don’t pay taxes. Also where is the comprarison to MPs pensions? They are public workers, why do they get the big pensions that the rest of us don’t yet you don’t highlight it? Also have you included all the bonuses and perks (such as cheap company cars) that the private sector get but the public sector don’t?
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Public sector workers are all paid from the tax pot, so strictly they are not tax payers they are all tax takers. How about we pay public sector workers tax free. This would save a whole level of civil servants in HMRC it would also highlight to public sector workers where the money comes from.
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Not just about pensions though is it ?
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Public sector workers are paid by other tax payers in return for a professional service, not as a hand out.
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This is a bad and unprofessional article. I do not dispute the figures – I am quite prepared to believe that public sector pensions are more generous than private sector ones – but it is ridiculous that you then make the value judgement that this makes it fair to cut public sector pensions as the government proposes.
Near the bottom of the article you mention the alternative idea of improving private sector pensions but you then remark, “In less austere times, that might be worth debating. As it is…it’s somewhat fanciful.” For a supposedly impartial news site to jump to this conclusion (without any statistics or analysis on why better private sector pensions are impossible) is breathtaking.
If you’d just concluded, “Public sector pensions are, on the whole, more generous than private sector ones,” that would have been fine, but as it is you make a subjective and politically charged judgement about whether or not that is fair and, if not, how the unfairness should be addressed. These are not the high standards I have come to expect from Channel 4 News.
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Yes. I have been quite taken aback by the C4 news coverage of this issue. Very tetchy. Very odd.
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What point I wonder is Lisl attempting to make with the query as to how long public sector workers servive after retirement compared with the equivelent in the private sector.I suggest the point might be who is costing the taxpayer the most? As the public sector employees have their pension contributions topped up out of taxation and the others only ever had a small tax relief on their contributons your query seems pointless….Sorry. But of course as the public sector retire earlier on average by 5 years they are certainly likely to be around longer to collect more from the public purse.
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It’s time teachers and the like woke up and smelt the coffee. There is such a thing as public sector mentality – and many teachers have it. It goes something along the lines of the world owing them something. Yes, their job may not be the best paid in the world – but if you look at how much they get paid an hour, it isn’t bad. Plus they have had the benefit of working in an environment where redundancy rarely happens. Why should we (and our children) pay any more for them to enjoy benefits that we don’t get ourselves. I wish they would stop whinging!
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Have you ever sat down and worked out the hourly rate for a teacher, or any other public sector worker who often works unsociable hours or does over time for free? I suspect not!!! Please keep opinions to yourself unless you can back it up with the facts.
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The world doesn’t owe me anything – I have invested money in my pension and don’t wish to have the benefits changed after I have already contributed 6% of my salary for the last 10 years. I don’t get paid a bad wage, but that is because I have spent several years not earning while working towards a degree and PGCE. Redundancy does happen – we have had 5% redundancies in the last year and all had our preparation time reduced so we can take on more classes.
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I am also a teacher that does not think the world owes me a favour – but does think the Government needs to give us what is owed to us. Teachers invest a lot of time and energy into their job – me and most other teachers work 50 hour weeks and do not get paid for every hour we work at all. I do not wnat you and your children to pay for me to have benefits – i pay for this myself in my tax and pension scheme (which believe it or not i actually PAY for each month out of my AVERAGE wage). And may i add that if people like us stopped paying into the pension schemes it would all go bust. Maybe you should research the facts before you make such rediculous arguments next time. You would soon be angry if your wages/pensions/benefits got drastically cut.
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I started working for the public sector at 19 and I’m now 40, my salary is nowhere near the figure quoted above and along with the pay freezes I will essentially be taking over £75 a month pay cut next year, I stayed in the public sector because of the pension and now even if I left I couldn’t afford to pay into a private pension. I didn’t cause the national debt but not only are the government putting up the cost of living to help pay it back but now my wages are frozen and my pension robbed, I’m sure that no self-respecting employer in the private sector would do that to any of their employees so why do the government think its okay to do it to theirs. The banks caused this mess get them to pay it off, stop their big bonuses!!!!!!
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Sorry but private sector employees would rob you blind if they could! The only difference is that now the government is trying to do the same to their employees. Difference is private sector managers are required to ‘maximise’ profit for shareholders, public sector is merely supposed to provide efficient and fair services for us all!
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Cathy i looked at annuity rates now and your figures say a private sector worker needs 200k£ to get a pension of 8k..look at this
Males
55 £7088
60 £7580
65 £8214
70 £9076
Females
55 £6858
60 £7276
65 £7818
70 £8632
The table above is for illustration only but gives an idea of what your provider may offer on a £100k pension fund after the £33k tax free lump sum is take.
who gave you the figures for the article..?
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The figs quoted are for joint life inflation linked annuities not single life. Reason being that a defined benefit scheme would provide a spouse pension in the vent of death and inflation linking.
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This factcheck confirms the lies the unions are peddling whilst trying to hang on to their gold plated benefits – even though the rest of the country tighten their belts. The unions should have the wit to realise that they’ll get no sympathy from the general taxpayer on this.
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I am sorry that many private sector workers are having a hard time. However many private businesses took pensions holidays in the 1990s and kept their money to pay dividends and high executive pay.
Workers in many private businesses chose not to join trade unions and act collectively to improve pay and conditions. It’s no accident that as the private sector staff stopped joining unions their benefits have reduced.
Cameron knows that trade unions provide strength through working people acting together. I dont just mean strikes but information sharing and insisting that health and safety law is properly done. The Conservatives want to get unions out of the public sector so they can push down wages and conditions.
As a public sector worker I have had 5 years below inflation increases. A restructure that has reduced my pay 2.5% from last year and a future pay freeze. My department has had 12% redundancies this year. The phrase “gold plated” doesn’t come to mind as my standard of living has fallen 2% per year for 5 years. Now another 3% is being asked for pensions that will add no benefit except for the treasury.
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Working in Retail – An industry which is very much under threat with so many stores struggling / closing down – I DO NOT support the teachers strike action tomorrow. Gold plated pensions and a Union that dictates when it so chooses are just pipe dreams to those of us working in the private sector.
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Retail is under threat because people cannot afford what they once could due to higher tax/bills/petrol/food/living costs – not because someone has decided to give you less for no reason. I am a teacher and i can assure you that public sector pensions are NOT gold plated – the average is 3,000 a year. NOT GOLD PLATED. We are not striking because we want the world – just a fair deal that we are legally contracted to. I pay alot into my pension scheme every month and if you look at the facts and figures current public sector pensions are AFFORABLE. They actually make the Government a profit – a profit they wish to make bigger so they can reduce the defecit. Why are public pensions being used to pay off the debt used to bail out the banks? Is it not fair for anyone to have such drastic cuts to their livelihoods – it would be nice for some support. Maybe get the facts straight next time.
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“The Office of National Statistics shows that, in fact, average pay is higher in the public sector.”
This is distorted by outsourcing of the lower tiers of public service work, which are therefore counted as private.
“It’s the generosity of employer contributions in the public sector that will still make it a more generous package, according to many experts, even if the Government’s proposals are implemented.”
The employers that have been taking the contribution holidays that are behind funds’ ‘crises’.
‘Faced with those figures, David Cameron knows that most voters who don’t work for the state will back him on pensions reform.’
Just mechanically? He’s trying to rhetorically construct this antagonism, and media networks like yourselves are boosting the signal.
Public sector workers are taxpayers too, and contribute effective demand. The notion of the public sector as unproductive and ‘paid for’ by the private sector is ideological
‘In less austere times, that might be worth debating. As it is, though, with the country struggling to pay off the deficit and householders fighting to make ends meet, it’s somewhat fanciful.’
There is zero…
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I am a low income worker in the private sector who’s experienced 2 pension contract changes in the last 5 years -the latest requiring me to pay 20% of my income if I want to stay in the final salary scheme. Ofcourse at that level I shall be forced to quit it! I don’t relish paying tax towards the very generous public sector pensions when I am still working at 67 with a much smaller pension to look forward to.
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This is total nonsense. The public sector is not a comparable microcosm of the private sector. Public sector employees tend to be educated to a higher level and employed in higher responsibility jobs. Teachers, doctors, civil servants etc. It is hardly surprising such people are better paid when compared to the average private sector worker. The statement is meaningless because this is not comparing like for like. A more revealing comparison would be to look at the pay of, say, public and private sector doctors.
It is all the more irritating because the public sector has been systematically forced to outsource lower paid jobs such as waste collection and cleaning to the private sector which will obviously raise the average public sector pay and benefits merely by excluding lower paid workers. Very sloppy journalism chanel 4.
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The argument is severely flawed and just goes to show how statistics can be mis-used for political reasons – one would have to compare for example a BUPA nurses salary and pension with that of an NHS nurse, a university scientist with a mathematical modeller working in the city etc. etc. The public sector is “highly qualified” – many of the lower paid jobs have been contracted out to private companies to save money, and highly paid private sector managers have been enticed to work in the public sector in the interest of improving efficiency. Scientific research, teaching, policing, fire-fighting etc. do not have direct equivalents in the private sector, and where there are equivalents (eg. teachers in private schools, scientists working in bio-medical companies etc.), they are paid better or equivalently with good pensions. Plus I’ll wager they also have private health care, performance related bonuses + many other perks. You simply cannot compare the median.
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for public sector workers its like winning the lottery at retirement age and then its indexed linked and carries on to the surviving spouse at 50%, I think I pay about £300 of my council tax to fund some of thse pensions. As well as a secure job, 6 months full pay and 6 months half pay if your off sick, not bad. I am 60 and have not be able to save for a pension myself.
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I ‘do not’ argue that I deserve a cushier retirement than anyone else. I am a single parent who has through caring responsibilities worked part time for 95% of my career and I only expect not to be in pension poverty when I retire. Under the new proposals I will lose more than £50,000 pounds ,work 8 more years and have to pay £60 more a month, that’s a days wage for me. I simply do not have any spare money to pay for this so I will be forced further into debt. My pension is not gold plated its £4,800 a year hardly the . We are not the cause of the financial crisis I suggest you make those who dodge their taxes cough up and put their money back into this countries treasury first before you attack hard working public sector workers. I will be on strike on June 30th.
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Do those stats include all public sector workers, if so if you take off the top 10 percent civil servant workers, how would the figures of pensions on retirement then compare with Lord Huttons minimum requirement of pension benefit
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I think what is proposed is reasonable it will still be a defined benefit scheme not subject to the performance of stock markets. They will have a guaranteed benefit at retirement far better than the most employees.
It would be interesting to know what changes there will be to the pensions of MPs and senior civil servants
T C
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I can’t believe you call this fact checking. I am a teacher, average contributions 6.3% of salary with an employer contribution of 14%. After the changes my contribition will be 9.3%. A experienced teacher without extra promotions should therefore be building up a pension pot at the rate of £8,500 per year. If I paid this into a SIPP for 30 years I would hope to build up a pot of about £500,000. This would more than meet the £12,500 pension I currently stand to get.
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Nobody would object to new employees paying more / having different terms, they would assume that pension regulations are part of their contracts but if you have worked for the public services for say 20 years and your retirement is within sight a sudden change in the rules could destroy all your plans.
I am due to receive my (state) retirement pension when I am 63 under the changes implemented by the last government. My friend who was born six weeks after me will have to wait until she is 66!
I know this has nothing to do with public sector pensions but it is an example of the high handed arrogant attitude of the current government.
Nobody would argue that the pension rules negotiated in the good times should be re-negotiated for the future, but teachers had already done that and the present government has simply torn up that agreement and wants to impose a new one without even publishing figures establishing the necessity!
Many people working in public services and looking towards retirement entered the service when salaries were very much lower than the private sector and have been paying for their pensions throughout many years.
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Compared to the average private sector employee, or worst still self-employed individuals, what the government is offering the public sector still seems generous. Why not remove the average salary DB scheme on the table and offer a defined contribution scheme instead. That surely is the truely fair scheme to all, let them suffer the ups and downs of the markets like the majority, who insidently may have to continue working beyond age 66.
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Nobody has ever doubted that public sector pensions are in many ways good and that the lower paid get a better deal than a private sector pension. However this is a contractual issue with employees agreed pension arrangements being stripped overnight. Not all private schemes are bad. I know many working for large corporations who have a non contributory pension and can retire at 50 or 55. Those in the private sector may also get perks and lets not forget the bankers bonuses still being paid in the billions when they created this mess. All in all very unfair to the public sector.
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I can assure Ian that those retiring at 50 or 55 in the private sector are thin on the ground. The real comparison is the bulk of those in the PS who retire at 60 for the female and 65 male. Whereas in the golden sector I believe its 60 alround. This means that taking an average of life expectancy in both sectors then who pays for the extra 5 years contributed by the state EMPLOYERS?
That can be quite significant when considering the highly paid in the public sector such as doctors with their golden salary increase given by the Labour Party,and of course all the others well paid due to their higher qualifications, as we are reminded by many contributers to comments.
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This comparison between public sector and private sector pay is very misleading because of types of the jobs you find in the public sector (doctors, teachers for example). These jobs are ‘well-paid’ because the postholders often have high level qualifications and will often have worked longer in their field – skill & experience aren’t cheap. What are your comparators?
How is it wrong to expect the government to honour deals that were made in good faith – or at least to expect that they should negotiate with us meaningfully if changes are necessary. Yet this government has shown us nothing but contempt. Meanwhile, we are told bankers contracts ‘cannot be renegotiated’!
If people don’t have decent pensions the state will end up paying out in benefits – isn’t this something the government wants to avoid? The paucity of the state pension is another problem. Compare this pension – or my state pension to that of an MP…
I’m not surprised private sector workers are angry – they should be. They should join us and demand decent pensions. We would back them all the way.
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The public sector might feel the assault on their pensions was fairer if it wasn’t just being used as a way to cut the debt. As Jon pointed earlier in the week, the forecast is that it will decline as a percentage of the country’s wealth in future, not increase.
They might also be more inclined to think the government were acting in good faith if people like Fred Goodwin, who played a major part in bringing about the financial crisis, hadn’t walked away with a massive pension.
I support this week’s strike action. If what they do is so important that a 24-hour strike will impact the public as adversely as politicians say, they clearly deserve decent salaries and pensions.
It was interesting to see the street clearner who is only on £169 per week on tonight’s news. When he stops work for a couple of weeks we all notice, yet when our MPs disappear for their two months’ summer holiday, no one will be able to tell the difference, yet the comparison in earnings and perks is massive.
What the world needs is a re-evaluation of what and who is important to the general well-being and reward them accordingly.
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Teachers especially get a more than fair deal.
More holidays than anyone else.
if they want more they should work the excess of the holidays & have the same amount as every other worker approx 4 weeks.
Teachers should also have to do their ‘inset’days in their own time – in holidays or weekends, not taking more time out of the school curriculum.
All public sector workers have a cushy deal. they hold their hand out at the end of the month for their pay. they take no risks, ups or downs of a business. let them all come and shadow a self employed plumber or a newsagent running a shop.work does not stop for them when they close the door of their van or their shop. they then have to sit down & do invoices, bills, accounts, tax & vat returns etc etc
Someone please show teachers what a real days work is….
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I actually take offence to the comment that all public sector workers have a cushy deal, when was the last time as a self employed plumber were you threatened because you couldn’t fix the boiler, when have you been approached in the street (outside of work) whilst you were with your children and yelled at because the water wasn’t working. I am told all the time that I work for the taxpayer and because of this people think that it is okay to swear, threaten and yell at you in and out of work. I am a tax payer also and I work hard for the little money I receive.
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INSET days ARE done in teachers’ own time ! pupils do the same number of weeks per annum as they have always done – INSET removed 5 days holidays from teachers . Many older teachers still call them Baker Days in honour of the politician who took them away. The government is doing a wonderful job of dividing the country along private/public lines .I wouldn’t want to be a self employed plumber/builder etc and am full of admiration for people who do these jobs ….i couldn’t plaster a wall if my life depended on it but would you want to be teaching a group of recalcitrant 16 year old boys MFL twice a week ( and the rest). we should be fighting for a fair deal for ALL and stop turning on each other.
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Only if you come and see what a teacher a nurse or another public sector worker does in their days work. If teachers get sucha a cushy deal, why is there still a shortage? and why arn’t you a teacher? Please refrain from commenting on things that you absolutely know nothing about!!
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Tell you what come and shadow me for a day. My dads a plumber (i’ve worked for him) and i’ve worked in many retail establishments, done invoices, tax returns etc so I know what your so called days work is like, and it is nothing NOTHING compared to teaching. As for the holidays try shadowing me for them too, I never get a free weekend throughout term time and never get half terms, we do have work to do outside of the school hours, we don’t just turn up and magically all the lessons are planned, books, exams marked and resources are made. Your obviously not a parent either otherwise you’d consider what longer hours/terms would do to the children.
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A Evans peddles a tired and ignorant misapprehension about teachers holidays. Outside of the 4 weeks other workers get WE ARE NOT PAID FOR OUR HOLIDAYS. Our pay is pro-rata and is spread across the whole year – but we are not paid when not working during our “holidays”. Many other workers – especially the self employed – could enjoy such holidays themselves as long as they too accepted not getting paid. And of course they could take holidays when they wanted – not only in the most expensive period of the year. Furthermore many teachers work for several days during those unpaid holidays.
Nor does our work “stop when we close the door”. We may not have to do invoices, bills accounts etc – but we do have to plan lessons, mark work, write reports, make pastoral calls to parents – before we even get into the extracurricular activities most teachers involve themselves in such as sports teams, school shows, clubs, charity events, trips, tutoring and mentoring, extra revision classes etc etc etc
I regularly work 14-15 hour days in the run up to exams. I worked across the private sector before becoming a teacher. NEVER did I work anything like as hard as I do now.
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The Police, Army, Ambo crews and Fire take no risks??? We work for our pay, the same as any self employed person does. Cushy, I wish. i have lost a knuckle, injured my back, suffered tendon damage on more than one occasion as well as numerous other injuries, loss of family time, work night shifts, have my duties changed at the last minute involving a complete rearrangement of my private life, and dealt with the absolute worst scum you could possibly imagine, amongst other examples, and you say we have a cushy deal. Join me on a saturday night and then tell me its ‘cushy’ and we are not worth our pay and pension.
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I don’t think I’ve ever met a poor plumber – not one that’s worth hiring anyway. Would I advise my kids to become teachers, or plumbers? Run up a £40K+ debt at Uni, miss out 4 years of earning, to enter a profession that no one wants to pay for but no one can do without? Or enter a skilled profession that similarly no one can do without but where we accept that you have to pay the market rate. Hmm, tough one that. No one enters the public sector for the pay. I shall go and stare longingly at my plumber neighbours BMW. Oh yes, if people really do think that teachers work short hours, rather than strike, it might be an idea if the teaching profession were to decide instead to “work to rule”.
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HA! I think this comment is laughable. My partner is a tradesman and has been self employed and knows many other tradesmen. As a teacher i work longer hours than he does. This is the ill informed attitude of some arrogant people who think teachers start at 9, finish at 3 and get 13 weeks holiday. I work 50 plus hours a week! If i only worked 9 -3 the children in my class would receive a very poor eductaion. When do you think teachers plan lessons for 30 children? 6 lessons a day? Prepare resources and activities that are appropriate for each ability child? Cater for all the different learning styles in the class? Mark all the books? Do their assessments? Staff meetings? It may seem like teachers get a lot of holidays – the chidlren are off, but the teachers are still working behind closed doors to ensure the best education for your children.Teachers receive about 5-6 weeks holiday a year and that is the same as many private sector workers. There are also many stresses and strains placed upon teachers. Also, apart from your tax (that i pay too) you do not pay into a government pension scheme. I do. This is defered pay and i should get this back in my retirement.
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Yet again the media has swallowed whole the myths of the Tory led government.
The real issue is not this attempt to divide and rule between the private and the public sector, but the fact that the additional 3% contribution from employees is going not into pension funds but straight into the treasury to bolster a deficit created by the banks. And all this at a time when bankers are raking in bonuses of £6billion and the wealthiest are getting richer.
There was a time when many private sector workers had better pensions than public sector employees and we need to ask why that is no longer the case. We need to defend our public sector pensions not just for ourselves but for our children who come after us, so that we can all have dignity in retirement, and not lose them like our colleagues in the private sector. We should reject the race to the bottom.
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Well put.
Reading the comments here it is clear the government have achieved exactly what they wanted which is to divide the nation so that any action by one section is seen as against the other. Divide and conquer, and bleed the masses dry for the benefit of their city chums.
How sad we have all fallen into this trap.
I agree there is a generally mentality in the public sector which needs addressing and there are as many inadequate teachers as there are excellent ones but this is not the issue here – what the govt is doing by robbing pensions is plain wrong.
And we are hardly going to improve the public sector standards by making it even more unattractive to bright and talented graduates.
What about MP’s, ministers and Whitehall civil servants? They are public sector – are they having the same conditions imposed?
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This article can be summed up as follows:
Public sector pensions are much better than private sector pensions and therefore the former must be scaled down.
No mention of recent changes to public pension schemes.
No mention of the affordability of these schemes on their own merit.
Analysis limited to a very general and narrow understanding of economics; no mention for example of the economic effect of higher pension contributions on an already stagnant economy.
No attempt to compare like for like professions; why not compare professions which need the same starting qualifications?
No mention on the long term effect on the economy of poorer teaching provision as high calibre graduates turn their back on the profession.
No mention on whether teachers are likely to ever draw a pension if they are forced to teach until 68.
The government are not so stupid that they think that people can teach and keep their health at 68. They know that people will have to retire early to keep their health and pay the penalty on their pension. This will make the schemes even cheaper to run.
A partisan, intellectually stunted article with cherry picked facts to conjure up a baseless argument.
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Very selective comparators used here.
What about the average length of service for the same employer/pension scheme. Private sector has much more staff turnover and people have small sums in pension accruals that are either frozen until retirement age or or transferred to another scheme.
Public Sector workers with no alternative employers available for their skill are obliged to be in the same scheme for their working life only to be told that the Fairness heralded by every government since WW2 is now to be abandoned because years of employment terms and conditions with suppressed remuneration is betrayed. Moral and psychological contracts have existed but the PM believes these can be ignored as it is easy to attack government employees rather than the financial institutions that created the unaffordable deficit. Public Sector Unions should mount a Class Action on behalf of disadvantaged workers who will now have a lower income than they were led to believe through out the last 20-30 years. It would be fairer to change the rules for new entrants and those with less than 10 years service so that alternative retirement plans can be made.
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Your article, although good insofar as it has some balance, does not really include any FACTS worthy of any use. Sure it has statistics, but as the article admits very few where true comparisons can be made. And that is where the problem lies. Each side of the argument can provide so called evidence that supports their argument. And each side will not accept the other sides evidence. At some stage the compromise will need to be found – and the sooner the better for all involved.
As a civil servant I prefer to refer to my employer rather than the Government. After almost 40 years of service I accept that the policies of my employer will change. I cannot accept though that my employer has a right to alter my contract of employment without my agreement. Indeed the 1972 Superannuation Act has provisons that Unions must agree to any pensions changes. In recent times the courts have ruled this to be the case in regard to redundancy compensation schemes but recently changed by another Act. But this recent change did not cover pensions. Why is the employer forcing a showdown? Are they hoping they can rely upon legislation to see them through? With Millibands backing -…
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Public sector workers do two things that many privately employed workers do not: 1- they pay their taxes with absolute accuracy and don’t winge about it. 2- they pay substantial sums every month into a pension scheme. Ms Newman should have taken into account the chaotic, almost anarchic state of private pension provision, which makes comparisons difficult to assess. If PS pensions are annihilated, for how long will the privately employed enjoy the thrill of seeing others in the same hole they’re in? Pension reform? Why not start with the private sector. Use MPs pension scheme as a model? What Ms Newman’s estimates tell us is how disgraceful private provision is. Final point – if public sector salaries are slightly higher than average now, then during my forty year working life they definiteley were not. Newman’s assessment is partial and does not regard the past 30 years. For most of that time public sector pay was very poor. It hasn’t caught up – it’s just that private sector workers have been screwed for the past fifteen years. If the present pace of ‘reform’ continues, public sector workers will be in a dire condition. They’re not so hot now.
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Just remember that the emergency services work to help the public. They work a lot of late and night shifts and respond to calls for help – often putting themselves in a dangerous, unpleasant or emotionally demanding situations on other peoples behalf. They can’t necessarily turn away from a situation as an ‘ordinary’ member of the public may be able to, and they lose out on family time to. This doesn’t compare to anything in the private sector – I don’t believe that private hospitals, security companies etc count as even comparable.
As far as the military – these people deserve to be looked after. The risks taken deserve to be fairly rewarded.
Teachers etc – all work hard, in often difficult schools. I don’t feel it is right to penalise any one set of public sector workers – if reforms are needed, then they should be put in place and any new joiners start on those terms. Changing current workers entitlements is wrong, cynical and unfair.
However, I also feel that some elements could pay more in contributions – Police and Fire pay 11% on the old scheme – increasing this is ridiculous, 11% is massive. Those who pay 0% – 6% surely have greater scope for an increase.
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Although facts and figures can be stated giving validity to either side of the argument for me the main issue is a contractual one.
If two parties sign up to a contract one stating that they will pay a percentage of pay, with the other party stating for this sacrifice in pay certain benefits would be accrued. How can one party change the terms in the middle of a contract???
if a bank providing a mortgage to an individual stated that the terms of the agreement no longer suited the bank could it change the terms without some sort of compensation to the other party (don’t think so) some people are currently enjoying very low rates on their mortgages as a result of agreements with banks of tracker mortgages. shall we say that to ensure the banks future liquidity that all these deals will cease and all mortgages will now have increased repayments over a longer period, people might feel a little aggrieved if they had to change their mortgage deal to a less beneficial deal in line with everybody else.
The government are trying to drive a wedge between private and public sector workers to get this policy through
How much are MP pensions changing and how much do they contribute?
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average private sector pension 1400 per annum ?
this is the most preposterous statement I’ve seen in this sorry ‘fact check ‘ on here
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As someone who spent a career in the public sector, I can state categorically that from 1970-the late 1990s, we were explicitly told that our pay was being reduced to take account of our pensions. My suspicion is that after the Government delegated salaries to local bargaining units in 1996, weak negotiators and the effect of equal pay legislation has eroded that differential. But it’s also worth remembering how many private sector pension schemes took a pensions contribution “holiday” during good times and then, in bad times, changed the scheme or closed it to new employees. The problem is that the Government seems to be attacking the public sector on pay, pensions (including retirement age) & jobs so an angry response is hardly unexpected. When an employer is only pretending to negotiate also annoys people. Added to the lenient treatment of bankers, allowed to keep getting their obscene bonuses, & you can see why the public sector (not entirely justly – as many private sector workers have already lost their jobs) feels it is being picked on. And Mr cameron represents a class that is sailing through these troubled times unaffected.
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From what I gather,noone has disputed that teachers and other public sector wokers have a good pension scheme.The fact is that this,and job security,are two of the main reasons why people work in the public sector.What is diffferent between public and private sector workers is that it is accepted that private sector workers take the rough with the smooth,they may not have such good pension schemes,but many firms offer schemes which workers can opt in to.Many offer other deals too such as private health care etc.Many private sector workers may accept their pension is not as good,but weigh it up against a great bonus when things are going well,a company car, or perks such as a posh christmas do,paid for by the company. Public sector workers have no such perks.A teacher or school can be deemed ‘outstanding’ but there is no bonus.A nurse or doctor doesn’t get a company car because they have saved 100 lives in a month. The fact remains that you cannot compare public sector jobs with the private sector. In my opinion, both public and private sector workers have the right to strike if they believe their contract has been broken, and they will be financially significantly worse off.
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A real day’s work? Try teaching Maths or Languages to 5 classes of 25-30 lively and often badly behaved teenagers who don’t want to learn. Idiot.
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I have a public sector pension and my husband has a private one so can speak with some knowledge of both. My husbands DB scheme closed some years ago and his benefits were frozen and he is now on a DC scheme which is actually doing ok due to his employers putting in generous contributions. My public one will be much smaller due to me working part time to bring up children but I can see the point that if something is not done, when the baby boomers all retire the system will collapse which will mean more taxes for our children or more borrowing which will be unsustainable in the long run. The problem does need addressing but they should remove higher rate tax relief first from high earners. These schemes should also be funded rather than just going into the treasury pot. My scheme is a local government one but I understand the deficit is made up by council tax payers. That does not seem fair.
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The caveats in this article are important! Comparison of average salaries tells us very little as the types of jobs will not be comparable and I imagine the standard deviations are huge and overlap significantly between the sectors. I have the same high-level qualifications and experience as my husband yet he earns £12000 more in the private sector than I do in the public sector. I was happy that while my salary will never be high, I will have other benefits including a good pension. I contribute 6.4% of my salary to my pension over 35 years: I should be able to trust that this money is safely invested for my retirement and not subject to the short-term pressures put on the treasury. Even the government hasn’t claimed that it should be affected by the deficit so I am disappointed by this author doing so. My pension was reduced by the previous government to be based on average salary, and this was deemed to be “affordable”: why this has changed so soon afterwards I don’t know. This government has already reduced it further by uprating by CPI rather than RPI with no consultation, and now wishes to go further while refusing to negotiate with unions. No wonder teachers are…
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Can I suggest this needs clarity from further research to see if it alters the final verdict?
“DB pensions, which are similar to the current public sector model,” what is DB to DC % of public sector pensions? Are you classing military and police same as a benefit officer worker? Are you perpetuating a lazy misconception DB is the norm across the public sector?
“the average public sector pension payout is around £7,800,” what % receive less than this average, and is the average inflated by larger pensions to a small number or particular type of public sector employee?
“average pay is higher in the public sector.” How was that statistic compiled – to what degree does it compare qualification and experience in the public sector with a comparable position in private sector? And how does this statistic compare over the last 20-30 years when public sector workers were making pensions decisions.
“In less austere times, that might be worth debating. As it is…with the country struggling” are you implying the only way to set long term policy on pensions is based on what can be afforded in exceptionally lean periods?
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Mary Bousted does not say where she thinks the money should come from to pay public pensions. It does not come from “Government” – some mythical beast able to create money out of nothing, indefinitely – it comes from private sector taxpayers. Even the salaries, out of which her members pay tax, is paid from the tax collected from the private sector. These private sector taxpayers, according to her, must not only fund higher pensions for the public sector, but also fund their own higher pensions.
Perhaps Mary Bousted should produce figures about the tax everyone should be paying in order to sustain these higher pensions?
It is unlucky to be alive now, because some pension chickens are coming home to roost, but railing against the facts of financial life – like so many Greeks appear to be doing – is unlikely to solve the problems created by previous Governments’ ignoring of the growing public pension deficit.
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Provided the entitlement that has already been accumulated is preserved, fair enough. Pension entitlement that is earned in future could reasonably be accrued under different rules. That has in fact been done before, so there is a precedent..
Well. Its almost fair. The switch from RPI index-linking to CPI instead is a Maxwell-esque swindle of the highest order…!
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Sorry, Cathy, you need a new calculator. The fact is that public sector pay is now on average (slightly) higher because for a couple of decades the lower-paid workers have been privatised, “partnered” and TUPEd: contractorised. Specialist have remained because the government cannot easily sell off their services. If you’re going to pretend to do a “fact check”, why not include all the facts?
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“and of course it’s difficult to find jobs in each sector that are exactly comparable”
Which means it’s a pontless exercise even trying to compare the two in the first place, but that won’t stop Cathy Newman as she has Cameron’s bidding to do.
Secondly, a gapping omission in this analysis is that not only does Lord Hutton’s report state that the burden on the taxpayer of private sector will be falling, but the Public Accounts Select Committee’s report also states that the current provision is affordable. Again, that won’t prevent Cathy Newman ignoring those significant facts in her role as Cameron’s spin doctor.
“As it is, though, with the country struggling to pay off the deficit and householders fighting to make ends meet, it’s somewhat fanciful.”
It is only fanciful insofar as the government’s deficit reduction strategy has ground the economy to a standstill, pushed up the country’s borrowing by £46bn, increased the claimant count, priced people out of the shops, driven up home repossessions etc etc. But hey, these are mere trifles when you have the grander mission of doing the government’s bidding.
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What a disgraceful article That Channel 4 needs to go begging to the government for public funding should tell you everything about their sucking up to Cameron and attacking public sector workers.
I bet Cathy has a cushty pension deal but she doesn’t mind the rest of us being stripped of ours. The question she should be asking is why many workers in the private sector get such poor wages and pensions. But that would require the values of fairness and honesty instead of the ruthless logic of the market.
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What your fact check shows is that while figures don’t lie, liars do figure.
Here’s a fact.
I have worked in the public sector for the last 27 years. Not in the over inflated wage land of the boardroom but on the front line. I have earned a reasonable days pay for a reasonable days worked and because I followed good advice and joined the pension scheme. It is not acceptable, having taken my money, for some corrupt politician to decide I must have less in my retirement because his mates in the banking industry were allowed to screw the country.
I had nothing to do with the great bankers rip off. Cameron has used it as an excuse attack me and my colleagues in the public sector, just to satisfy his bigoted hatred of the public sector. I have suffered a pay freeze even though inflation is at its highest rate for a long time. Hundreds of thousands of public sector jobs have gone (none at the top). Those of us that were left have had their wages reduced. Reducing our pensions is the final straw. All the conservative propaganda is not going to change that.
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I’m really disappointed in Cathy and Channel Four for trotting out the the same establishment line while at the same time reporting on the financial crisis in Greece and elsewhere without joining up the dots. I always thought you reported the facts. You have taken some statistics, taken it out of context and passed it off as facts. This all part of making working people everywhere pay for the markets speculation and crisis. There are no such things as bonuses and commissions for most people in private never mind public sector. You make it sound as if it is unfair for teachers et al to expect no cuts in pay, pensions or increase in pension age. I didn’t sell on packaged dodgy mortgages while earning massive commissions or gamble so much that if they had been left to the free market they would have gone bankrupt. People should have been told at the time that saving all these banks would mean that the everybody would either be thrown out of employment/have massive cuts to wages and pensions if you were still in work. Should we tax the people who caused this and take a percentage of their future bonus’s or make everybody suffer? They weren’t so private or free market capitalists…
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Gosh. Where to start? Just because a politician says the word ‘fair’ a lot, does not make it so.
I totally raked it in as a teacher with my gold plated wages, sat with my feet up all day, went home at 3pm and laughed at all those in the private sector while I took my excessively long holidays. I have never done a days work in my life. What a load of twaddle.
Teaching or working in the NHS, care service or public service in general is not the cushy little number that the propaganda machine constantly tells us it is. They are IMPORTANT and difficult jobs. We hold responsibility for a child’s development and education, sometimes when a parent has abdicated that responsibility. We care for the sick, the elderly or those in distress. These roles are often emotionally challenging, physically tiring and always drowned in(often pointless) paperwork.
Personally, when working full-time as a teacher, I never worked less than 60 hours a week. At least 3 weeks of my main ‘hoilday’ was taken up with planning, assessment, marking etc. Half term should be renamed ‘catch up on the impossible amount of paperwork week’.
Teachers die young beause we work bloody hard.
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WHY IS IT NEVER MENTIONED THAT WHEN THE PRIVATE SECTOR PAYS LOW WAGES HOUSEHOLDS RECIEVE INCOME SUPPORT TO MAKE THEIR WAGES UP .THIS IS PAID FOR BY THE TAX PAYER.
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I would also like to say this is total rubbish…but I cannot believe that you would put your name to such nonsense so I and my excel spreadsheet must be wrong!
“They (NAPF) put the average lump sum a newcomer to the world of work will acrrue in a DC pension at around £20,000, giving an annual salary of just £1,400.” I take it you mean a pension pot of £20,000? If so then that only amounts to saving about £500 a year-not taking account of interest-for say 40 years. That is about 2% total contributions from both employee and employer. You state that private sector employers pay in about 6% so total cannot be 2%.
If we allow both employee and employer to contribute 6% per annum for 40 years on an average salary of around £25000 then assuming an interest rate of say 2.5% per annum (low?) we get a pension pot of around £207,000. This is more than the pot you suggest is necessary for a pension of public sector proportions. So where is the problem?
Cathy, you need to check your facts not just quote press releases. Again, if we use PWC figure of 30% of (average) salary as the employer contribution then you would end up with a pension pot of over half a million?…
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Gold plated pension – The average Civil Service Pension £4,800.
Job for life – 100,000 jobs lost since 2005 with 30,000 more to go before 2015
Public Servants are well paid – Since 2007, basic pay in the civil service has increased by 6.5% and inflation by 10%. Almost half (48%) of civil servants are in admin grades where the median pay in 2009 was £17,120 for women and £17,600 for men.
35,000 (7%) civil servants are paid less than £15,000 a year.
40.5% of civil servants – 210,000 people – are paid £20,000 or less. And 63% of civil servants – 330,000 staff – earn less than £25,000 a year. There is now a 2 year pay freeze at a time when inflation is running at 5%.
Civil Service Pensions were reformed as recently as 2007 and both the National Audit Office and Lord Hutton’s report state that the costs are reducing and they are sustainable in the long term.
There are alternatives – Close the £120 billion Tax Gap, introduce a Robin Hood Tax, cut higher rate tax relief on pension contributions, remove VAT exemption from Private schools.
It’s all about choices and Cameron has chosen his side.
Shouldn’t someone writing something called Factcheck actually…
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Massive job losses,pay frozen or cut,pay more,work longer and receive less.Why would anyone not want to protest.Don’t fall into the condem trap of pitching private against public. In 2011 it should be a basic human right to be paid a living wage with some hope of a retirement that does not lead to penury. Good luck on Thursday folks it is only the beginning.
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I can accept that we may have to increase our contributions, but what I am findinf difficult to digest is the quote by the unions that the rise in pension contributions is not going into the pension scheme but into Treasury coffers. Is that true? Is that legal? I rang my local pension office (South Yorkshire Pension’s) and they said it was news to them. Who is telling the truth?
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Defined contributions ADD an higher rate of both employer’s and employee’s NIC that generate a SERPS pension. That’s why I get an NI pension of £161.65 per week: well above the standard NI pension a public sector worker now gets in addition to her works pension. I’m likely to get an extra £20+ per week from an opted out SERPS portion too. Those are additions to modest works pensions.
All of which makes DC pension contributors a lot better off than this C4 analysis reveals.
[OK, I know the Coalition also plans to take those SERPS pensions away from me. Which might be called theft. But that's an issue no-one else's brought up yet.]
GO BACK TO YOUR COMPARATIVE CALCULATIONS – and do them with NICS, tax reliefs & SERPS fully accounted for.
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You compare the median public sector worker at £13.54 per hour (which corresponds to £26,403 p.a) – e.g. a graduate teacher with 2 years experience.
Your median private sector worker at £10.06 per hour (19,617pa) corresponds to a semi skilled worker (e.g. a fork lift truck driver / a help desk operator).
Is it so unreasonable that teachers get paid more than truck drivers?
My opinion of the median Channel 4 News reporter has taken a serious tumble
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This is an appalling article. As it was called Factcheck I expected it to be fact not just a journalist’s opinion with a few carefully selected statistics to boost the argument. Anyway despite what the government or public think, there is a very clear fact to face, cut public sector pensions and pay and people won’t bother to work in them.
I work at a college were lecturer pay is been cut by an average 35%, giving a maximum final salary of £23,500, many have masters degree and PHDs and are already looking for other work, I estimate by the end of the year over half the workforce will have left.
So if you want to cut pensions and pay be prepared for the cut in the workforce that will follow… you pay peanuts you get monkeys!
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I sympathise with public sector workers to some extent. Those less than, say 20 years from an agreed retirement age shouldn’t have these changes forced on them. The govt is acting in a very arrogant and inflammatory way. But, long term, change is needed and new starters or those a long way from retirement need to accept they are not ‘special’ and do not work harder than the private sector. The few exceptions are essential workers such as the fire service, police, nurses & doctors etc who deserve to have increased salaries to cope with the changes. Its a pity the media focusses on striking teachers as i feel they evoke the least public sympathy. There are as many bad and lazy teachers as there are good hardworking ones and cushy pensions/holidays tend to keep the bad ones within the job. Unlike the private sector, it is still pretty much jobs for life in the public sector, contributing to a slow decline in the calibre of employee – many would be sacked in the private sector. I’ve worked in both- private is leaner and meaner, public sector don’t realise how good they have it.
Agree completely that MPs are public service workers and the same changes should apply.
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Completely agree R Coleman’s comments. Cathy, you and your researcher seem to have missed the fact that in his report Hutton, at one point talks about “the average pension….around £7800 per year, while the median payment is around £5600″ Oh dear, poor old John seems to have been unable to clarify which average the “£7600″ is. Could it be the mean (a figure massively distorted upwards by a few high paid Whitehall types) or the mode (which would tell what most Public sector pensioners will get). In your report you talk of NAPF’s figures for Private Sector pensions showing that the “average value of a DB pension was £7467″. Which average would that be then? Your article cannot be taken seriously until you state clearly and transparently which types of averages you are using for each statement you make. By the way, did you know that existing Pension scheme member’s(those who joined before July 2007) accrued rights are protected and they can still draw them at 60? Had you noticed that Public sector workers have not had pay rises for 3 years now? This pension cost could be managed through lower pay rises in the future although I don’t see people beating a path to the…
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Why won’t the government agree to an independent valuation of the teachers pension scheme? What teachers pay, in pension contributions from their wages, over their working lives, more than covers the cost of the pensions they receive. Maybe Cathy Newman could do some number crunching on that?
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I have over 25 years work experience in social care / support. During that period I have worked shifts of over 24 hour hours, weekends & bank holidays etc. I have been physically & verbally abused on too many occaisions by some seriously damaged & disturbed individuals.
During that time I have tried to maintain a professional, dignified and high quality standard of work. I have a degree and a post graduate qualification, my salary is around £26,000 and I know that I will not be in receipt of a large yearly pension when I retire in 17 years time.
Most people working in the public sector, do so because we believe in a public service ethic and have a genuine desire to help others, which is in stark contrast to what we have witnessed over the past years from the banking and financial sectors.
Your comparisons of pay & pensions etc, appear to based on a ‘quick & dirty’ methodology of research rather than any in depth analysis.
Please dont narrow down this important debate about the future of the public services in the UK in this way, it is beneath your usual high standard of journalism.
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As a maths teacher I worry about you posting some selective statistics and a bit of opinion as a “Factcheck” – I am always careful to flag up in a lesson where something I say is my opinion rather than a good solid fact.
A lot of the teachers I know work 8-6 in school and some time in the evening or weekend, this averages to 40 hours a week for 52 weeks of the year – please don’t characterise us as lazy.
I have friends in the private sector with the same qualifications as me whose bonuses are around the same size as my salary – taxing this properly would save a lot more of the deicit.
Also, relatively few public sector workers are on minimum wage so the median salary comparison is misleading in terms of the jobs done.
Please stop trying to turn the public against a group of professionals whose agreed pensions are being changed with no justification or negotiation – something we are entitled to through our union.
I have the right to strike and will be exercising this right with a clear conscience on Thursday.
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My friends and I are educated to Master level and have worked in the voluntary sector and research for over 20 years.We have worked alongside public sector employees who are less educated and yet paid more , have very generous pension and (most)do not work as hard because they canmot be dismissed no matter how ineffective they are. Your children will have to pay your pensions as they will be the ones working when you retire because with the exception of Local Authorities there are no public pension savings. Will they want to pay for a scheme that they will never avail of..I know I don’t. I saved for 15 years into Equitable Life and will be lucky if I get a pension of £1500 a year. Private sector employees will have to work to 66 and above,retire on very low pensions and pay taxes for public sector employes to retire earlier and have far better pensions. Everyone is living longer, public sector pensions are not affordable and the country is broke even before the bank crisis. So many private sector employees are unemployed, businesses are closing down everyday. You are being asked to pay a bit more and work a little longer like the rest of us.get a grip! Your tales of woe don’t…
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I would love to know where you got your masters and what in MPFG? Or indeed what kind of research you do? Some very woolly thinking here!
I have worked in the public and private sectors. Trust me most public sector workers – motivated by a public service ethos and not just money work MUCH harder.
We will pay for our pensions, not our children. We agreed to changes three years ago that made them sustainable. The Hutton Report & House of Commons Public Accounts committee both accept they are sustainable. After the baby boomers pass through the system over the next twenty years or so, the cost will actually fall. They are affordable.
Private sector workers at 66 won’t have to deal with violent criminals, burning buildings, patients with cancer, 30 stroppy teenagers etc etc
The financial sector screwed your pension, not us!
The country was not “broke” before the financial crisis. The ‘structural’ deficit was 1% of GDP before the crash and 9% after. National Debt was lower than most of our competitors. The highest year of public spending under Labour – a response to the crash – was lower than all but 4 years of Margaret Thatcher’s spending!
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Law of unintended consequences.
Thatcherism decreed that large swathes of public sector activity should henceforth be outsourced, removing large numbers of workers with modest actuarial and pension expectations from the public sector pension schemes.
At the same time, the managers now responsible for those outsourced operations claimed their job was now more complicated, more private sector like, so they deserved salary increases which increased their final salary, increasing the future burden on the pension schemes.
Cuts to many public sector budgets were in large part delivered the easy way, by giving early retirement to those affected, yet again increasing the future burden on pension schemes.
At the same time as boosting future pension liabilities, cash strapped councils (with encouragement of Government), stopped paying their share into pensions, some for years.
Enter Gordon Brown, with his raid on private pensions and insistence that pension liabilities, which inevitably fluctuate with stock markets, should be shown on the company books. Not surprisingly, the reaction of companies was to start winding them down, causing the perfect storm we see today
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Struggling to pay off the countrys debt? Does the Government really need to rob public sector pensions to do this?
Then why was corporation tax lowered allowing £100millions of profits made by UK businesses abroad to not pay corporation tax at the difference between origin country and full UK rate? Why not close all tax avoidance schemes? Why not have increased wealth taxes? Why not tax banks profits more heavily? Why not stop spending billions on wars?
Thes attacks are not about the ‘cost’ of pensions but a continued softening up for the full transfer of public assets and workers into private profit making hands. Precisely those interests which back the Tory Party.
Your analyst really does need to define ‘country’ more clearly as the term obscures the political ideology driving this and plays to the ‘we are all in it together’ deceit.
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When I look at all of this I see that the unions have a point.
“We have signed up to a deal (with the government for pensions) and I would like that deal honoured please”.
However, I also see the government’s position. For one reason or another these schemes are, or will become, too expensive for the rest of the taxpayers to maintain.
This has occurred because previous governments were by far and away too generous with pensions schemes to be paid out “in the future” and the same situation has occurred in the private sector with most DB schemes being closed.
Fortunately the present government sees the problem and is trying to do something about it, which will be to the ultimate the benefit of all of our society not just one selected group. The previous government would have just kept going till it all hit another set of buffers.
The word “unfair” is misapplied here by the public sector employees. It is soley a matter of who pays and when and whether they can afford it or not.
PS. I prefer the phrase “bomb-proof”(government backed, can’t fail) to public sector pensions as opposed to “gold-plated”.
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But if governments change the pensions every four years how ‘bomb-proof’ are they?
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Yet another significant fact that you failed to check. The Civil Service pension scheme, to which PCS members belong, was reformed in 2007. The final salary scheme was closed to new entrants. The Civil Service already has a career-average scheme, with a retirement age of 65, which applies to everyone who started since 2007, and all new entrants. The issue here concerns the contractual rights of staff remaining in the old scheme. “Fact check”? I’m not impressed.
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Public sector employees who are close to retirement, or already retired, are faced with a change from RPI to CPI indexation which is estimated to accumulatively reduce their pension by 15-20%.
These are the men and women who worked in public service when, as even Hutton admits, they were underpaid compared to private industry. Also now they are retired there is no opportunity to alter their pension planning arrangements.
A double whammy to a group without represntation and facing a rate of inlation which is higher than RPI (according to Age Concern).
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You write “According to Lord Hutton’s report, the average public sector pension payout is around £7,800, or £5,600 as expressed as a median payout. The unions have gone to great lengths to point out that many lower-paid workers will get substantially less than this.”
The average and median public sector pension payout figure is utterly irrelevant for any comparative or illustrative purpose. Such pension payouts depend both on final salary and years of service, so someone who does 40 years gets four times more than someone on the same final salary with 10 years service.
The figures also ignore the lump sum paid (3 times annual pension) also paid.
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You don’t have to be a public sector worker to understand how teachers have been [badly treated] by both Labour and Tory/Lib governments. Now they are being vilified for protecting the one part of their pay that was offered in the past as a sweetener when other parts of their pay were being cut. They are right to be angry but I do feel that striking now will play into the government’s hands just as the miners strikes did all those years ago. Given the chance we would all fight for a fair wage for a fair job. And if anyone brings up the supposed long holidays school staff supposedly get, ask your local school caretaker how often he has to open the school for staff during those holidays and what time he has to lock up because they’re still there late into the evening? Best of luck to all striking workers. You are perhaps going to need it!
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Come on everyone – can’t you see the government is being very sly. Divide and conquer, that is what they are playing at. Turning the private sector against the public sector. We’ll be too busy fighting between us to notice what they do next. We shouldn’t be arguing about who works hardest or who is more deserving – try to look through the smoke and mirrors and find out what Cameron and co are planning next. Let the public sector fight for their pensions, the rest of us may have to fight for something we care about next!
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Having worked in both the public and private sector I will say that many workers opt out of private sector pensions because they are ‘too costly’ and companies have not been forced to put in enough to make it worth it. This is balanced by the fact that private pensions are flexible and can now be moved from job to job, so private sector employees can chase the best jobs and get the wage increases if they are pro-active. Public employees are completely different, they are usually tied to a certain job, tied into fixed pay structures and tied to the government policy of the day such as wage freezes. However to counterbalance this the employer does put into the pot more than in the private sector. It is not enough to compare private pensions to public pensions because public employees do not have the same benefits with flexibility that private employees have, and this is critical to career progression and over all lifetime salaries.
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Lord Hutton says that public sector pensions will be at 1.9% of GDP for the year 2010/11 and will decline in future years to 1.4%.
The ASHE data shows that if you take gross annual earnings as the mean the private sector are 5% better off.
If the banks are included as “public sector” this will skew the figures. You also have to add in the number of public sector workers who have specialist qualifications in health, engineering, building control etc which require degrees. Who are the ONS comparing; a teacher in the public sector needs to have a teaching qualification whereas this is unnecessary in the private sector.
What happens to the extra 3% that public sector workers contribute to their pensions? Is it going to their fund or to the treasury? It looks like the latter and therefore it becomes a 3% tax on working in the public sector.
Digby Jones, ex cbi, was on the radio this morning advising public sector workers take less. It’s ok for millionaires like him and the current cabinet. Ordinary public sector workers do not stash their money in tax havens and as a result have their savings raided by the Government when it is short of cash.
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Is there an elephant in this room.
Has anyone asked the pupils if they want, or can be, taught by “their” grandfathers/mothers?
I would hate my grandchildren to be taught by someone in their late sixties. It is too old for the type of energy,fast thinking and tolerance that teaching entails. Does the argument go, well if they can’t afford to pay private fees, what can they expect or perhaps, we will make everyone so disatified that we can privatise the whole lot? or even, we will ensure that that people have to retire early so that they get a restricted pension. What about the next generation of teachers waiting in the wings for jobs.Think on this,passport control, everyone on their toes now, dosn’t matter if you can’t quite see properly and you may not be so alert and its too long a day for you to have proper concenration.
I’m an older working Grandmother but I do know I have some limitations. Does the Government? Can someone re-assure me this isn’t some crazy short term scheme.
Incidentally, at what age do MPs retire? How much does each one cost us?
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All workers should be supportive of the strike. Workers didn’t cause the financial crisis, the banks did. Get the money from them.
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Why don’t teachers take a second job if one is not enough to pay them what they want??? most people in the private sector have to do this. I had to do 3 jobs a day to be able to support my kids & not depend on the state. it never did me or my kids any harm. my kids have a great work ethic & don’t expect the world to owe them a living.
My youngest was made redundant & was out of work for over a year, but would not stand in a line & claim dole. she lived off her savings instead.
Teachers have rowdy kids now because years ago they all wanted to come to school dressed like leftie hippies & wear scruffy clothes…. what example did they set? Kids are out of hand & a lot of that is down to the teachers..
my plumber works 6 days a week & on the sunday he does all his invoices & paperwork. Self employed people are unpaid tax collectors for the government.
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When exactly do you propose we do this second job? Most teachers are at school before 8am, leave about 6pm, to go home and mark books. Much of the weekend is spent planning for next week’s lessons. Many teachers are studying part time for a masters so have to spend one evening a week at uni, plus many researching and writing 4000 essays. And before you mention our apparent long holidays, when do you think we find the time to research and write dissertations? Plus plan for the following term? Yes, that’s right, during our holidays! Unless you are seriously suggesting that teachers work a night shift, then come into school and teach Britain’s children I suggest you spend some time actually finding out what a teacher does actually do. As for teachers being responsible for the rowdiness of kids, according to the findings of my master level psychology degree, much of how a child behaves stems from leaned behaviour from home, so please take responsibility! PS I have NEVER dressed as a hippy, or worn scruffy clothes, what a stupid argument! Anyone with the mentality to seiously argue this point, needs to go back into education themseleves to learn how to make a valid argument!
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Dear dear dear, when will these people start looking at this like the intellectual class they claim to be?
All this “I-work-harder-and-longer-than-you-do” isn’t the point. It is similar to the teenagers who say “I-have-worked-hard-so-I-am-entitled-to-my-A*-thank-you”.
All of this pensions thing is a matter of economics.
Nobody ever seems to question governments giving away money but people always complain if it is eventually found to be too expensive and is taken away no matter how good the explanation is.
Look at Greece, don’t you think these rioting people have a point, but the country hasn’t any money. Everybody (including the Greeks) know that. Their governments have spent more than they earned. They can’t even borrow money now.
Paying for pensions is a function of the wealth of the country. If the bill is too big by comparison then everything else and everybody else suffers disproportionately.
When I stated up the page a bit that I preferred “bomb-proof” for state pensions 68ron queried this by saying that they couldn’t be bomb-proof as the government had changed them several times in 4 years. Sorry 68ron you still have a pension after 4 years of changes.
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One of the interesting side issues to this debate is that whenever the government quote Lord Hutton, they always emphasise that he is a former Labour cabinet minister as though that somehow validates what they are doing. All it really does is to underline how right wing Blair’s government was.
Yet Cameron seem less to take the advice of other labour cabinet ministers, past or present, and even when Ed Miliband agrees with him and says the strikes are wrong, he still attack Miliband on the grounds of his union connections.
Like so much of politics, it’s all a point-scoring game and the lives of real people mean nothing to them.
I guess the distressing thing is that they believe that we can’t see through their duplicitious little games and realise they are the same old tories who believe that most people should be the worker ants keeping them and their rich mates in comfort.
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Factcheck: It seems like you are basing your whole argument on what public sector workers are currently earning compared with the private sector – whereas you should be basing your argument on that comparison for the whole of the time those workers have been contributing to their pensions. I believe the narrowing of the difference has only been in recent years.
Additionally, how many other people would sit by if their employer came to them after 20 years of service and said “We can’t afford to pay you what we said we would when you joined so please can you refund some of your salary to us now thanks.
Can someone explain why pensions has become a race to the bottom – the argument here should be about how to improve private sector pensions. If we have a thousands of broke OAPs in future then this will be an issue for the Government and taxpayers in the future. If the then Thatcher government hadn’t allowed so many pension holidays companies would have carried on paying into pension schemes in the private sector and they wouldn’t be in the situation they are now in.
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There seems to be a serious lack of facts and in principle the fundamentals should be simple:
On average will the contributions of an employer & employee now staring cover their anticipated future benefits?
THE PROBLEM IS THAT WE DON’T SEEM TO KNOW THIS. Only once this is clear should options be evaluated and the debate/negotiations start.
In general the private taxpayer should not subsidise the public sector pensions (beyond normal contributions) and equally public sector pensions should not be used by the government to plug the deficit. However it may not be fair for a newly starting employee to cover the potential liability shortfall of those about to retire – a possible serious failing of past governments?
In terms of existing scheme members it must be remembered that accrued benefits are protected. Therefore anyone with long service will never have a “bad” pension. Given this it seems reasonable that future service benefits should only carry on as is if funding is sustainable but change to that of new starts if not.
The public sector deserves a good pension, but only one that in the long term can be funded through reasonable employer and employee…
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To Adamneveit
If you don’t agree with my points can you address the issues rather than attacking my qualifications……which are a degree in Mathematics and masters in Qualitative Research from top English Unis I have worked alongside many public sector workers who are unaccountable and do not work hard in comparison to equivalent private workers. I know ‘workers’ who earn over 60K , do not contribute to their ‘business’ sector. Posters here are happy to decry plumbers and other private sector workers as fat cat earners who don’t pay taxes..and at the same time state that this is a battle between private and public workers devised by the current government. Seems people on this site are doing a good job to perpetuate this division.Private sectors workers like taxi drivers, shop workers, barmen, estate agents, labourers, van drivers,work very hard ,in dangerous circumstances, will have to work till 66 and as tax payers will have to subsidise public sector pensions. BTWNational public debt was 47% of GDP before the banking crisis in 2007, and there is no public sector pension saving pot (except for local authorities)so furture taxpayers ie your children will carry the…
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Haven’t you put your finger on an important point – the fact that successive governments of all persuasions have treated the pension contributions as just so much more tax for them to spend as they see fit.
Now they are in a miss, they are shifting the goalposts to the disadvantage of the people who have paid their contributions.
If a private company entered an arrangement like this and defaulted in the same way, it seems likely that they would be prosecuted.
Any government is faced with a choice in what it spends tax payers money on. Some things it seems are sacred – wars, armaments, generous provision for MPs, the maintenance of grace and favour housing for ministers. Others like teachers’ pensions are up for grabs.
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“with the country struggling to pay off the deficit”. Ahhh, please, please stop using the word defict when you mean debt!
Defict = Overspend
So, we can’t pay off the deficit – just reduce or eliminate it. We can only then start to pay off the £1 trillon of offical debt and the additional £2 trillon of pension and PPI debt that doesn’t show on the governments books.
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I am a psychiatric nurse on an ordinary nurse’s salary. I get sworn at daily several times, I get physically attacked spat at and have been hold hostage for several hours with a large piece of glass held at my throat. Yet I have never moaned, complained or stopped caring for my patients. Over the years I have had changes made to my role, where I work, how I work sometimes on a daily basis but never get a thank you. I resent the government leading people to believe I as other public sector workers are going to get a ‘free’ pension. I pay £200 a month into my pension scheme yet are being made to look and feel as though I am a scrounger.
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I think another issue which isn’t considered is that public sector jobs tend to be more managerial in my experience. There are a great many low paid staff in the civil service, but there are many fewer since cleaning, maintenance, catering staff etc were outsourced to the private sector (often at lower wages).
Second, I am pleased to have a public sector pension and very proud of my job delivering public services. However, it was part of my employment contract when I took my job. Who would accept such a fundamental and one sided change to their terms of employment without question? This change will cost me about £400,000 in terms of higher monthly contributions, over a longer working life with lower pension payments in retirement. Who would accept that?
Finally, I am a triple graduate, one of my degrees is a first class degree in law. At the age of 36 is earning £36,000. I could earn much much more in the private sector and many of my friends and university contemporaries do. I chose to work in the public sector because I believe in public services. However, I took a job based on a contract which I found acceptable and someone is now tearing that to pieces.
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People who complain that workers in the private sector get low salaries need to bear in mind that currently the UK is in recession. When the economy recovers (and it will) many of those working in the private sector will reap the benefits of the boom years and get higher salaries. This is what has happened in the past. For years the public sector employees got paid much less than the equivalently educated private sector employee.
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One area that you haven’t included is the armed forces. Perhaps the most generous pension plans are for the armed forces. 0% employee contribution for officers and others and 37.3%, yes thirty seven point three percent, employer contribution for the officers, (that’s you and me as the government hasn’t any money). Source Hutton report. This compares with 5.4% and 14.9% for the private sector. No wonder we keep having so many unnecessary wars to keep the ‘game’ going!
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Bit of a cheap dig at the Armed Forces…
We have no Union, and I didnt see people moaning about what we did when it came to defending the countries interests?
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I agree – why is it public sector vs private sector? This is the result of the media and is what the Government wants. Without support they know the effects of the strikes is weaker. Public sector workers are fighting for a fairer deal – if we let the government change the goal posts and rip us off now, where will they end? What will it be next year? We need to unite and stand against injustice – even if it is not fair. Public sector workers have taken wage freezes so the government can bail out banks etc and halp resue the economy – we supported this so it would be great to have some support back.
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Is this Channel 4 cosying up to the government? Perhaps trying to fill the vacuum left by News International?
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David has taken a leaf out of Maggie’s book – divide and conquer. While the public and private sector tear chunks out of each other, the real argument isn’t exactly raging. Meanwhile, the rich get even more tax breaks.
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All news reports, including yesterday on Channel4′s 7pm News, accept without question the govt story that those earning less than £15k are not affected by the pensions penalties – they are.
The £15k limit refers to full time equivalent posts. So those earning, say, £11k as a part-time worker in a post with the full time equivalent salary of £22k, will pay the full amount.
The majority of part-time workers in the public sector are women. So, not only is the government attacking hard working people with these measures, they are also discriminating against women. I wonder what kind of equality impact assessment was made.
So a heart felt plea to Cathy Newman and other reporters and commentators on this issue – please tell the whole story, this will seriously effect the low paid in our society.
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I have previously worked in the private sector, and now work in the public sector.
My role in the private sector provided me with a company car, phone, 20 days paid holiday a year, a work load that meant a minimum 60 hour week. My pension was DC, to which my former employer contributed 1 percent.
My current role in the public sector has opened my eyes. I do not get a company car or phone – but that is because I do not have to travel 60000 miles for my employer. Likewise, the provision of a phone was not a perk, but a millstone around my neck – allowing me to be contacted by them 18 hours a day.
I have a degree, and have to say that I am in the minority in my new public sector role in having that qualification. The salary I now receive is 18 percent higher, I get a final salary DB pension and 28 days paid holiday a year. My new work load is a fraction of that of my previous, and I rarely work more than my contracted hours.
The absenteeism rate of my new colleagues is so high, that I cannot believe they are not disciplined over it – especially when some return to work with a tan!
I know which employer I prefer!
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I fully concur with Ian’s sentiments regarding the comparison between public and private sectors. I was for 25 years a site manager in the construction industry working on contracts for local and county authorities. Although there was a core of necessary and conscientious public employees in the areas of my experience there were also far too many surplus to requirement. At site meetings there would often be a number of their staff accompanying the clerk of works and architect who had no connection with the projects, but just out for no more reason than to fill in their day.Can anyone imagine that in the private sector? Yes, well you’ll always get the odd case. To attempt contact with staff for urgent queries was very often to be informed that they were on their (numerous) leave days. I found generally no sense of urgency as they, unlike me had no contractual dates to comply with. Time being of the essence in an attempt to carry out the work on time, and more importantly to ensure the contracts within cost. Something never appreciated in the public sector, they had little conception of too much over cost could, and often did, equal no job. My number of assistants were very…
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Having also worked in both sectors I would strongly argue that the idea of public sector profligacy and laziness and private sector industry and efficiency is hogwash. I work far, far longer hours as a teacher (yes – including my UNPAID holidays) than I ever did in the private sector and often have to subsidize my work place by buying needed materials myself – without tax breaks of course.
Just stop and think. The luxury area of a plane is BUSINESS class. Extravagant meeting facilities at sporting venues and in hotels are called CORPORATE hospitality.
I was recently visited by a friend who works abroad for a UK company. he took four of us out and put the whole evening on expenses as the other two lads worked for a company he was doing business with.
I was trapped in the USA by the ash cloud two years ago. Whilst I desperately tried to get back to the UK because I did not want to let students down in the run up to exams, the hyper hard working, efficient private sector lads had themselves put up in a luxury hotel at their firm’s expense and enjoyed a week’s holiday. Apparently their work place could get along perfectly well without them!
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Sargrith and Ian may be right about their private sector employers and the pressure they worked under, but this is a reflection of the incompetence of much British management, not efficiency.
Our lax employment laws mean that it is much easier for British managers to simply sack some people and make existing staff work harder for less than to look at how they do things and find genuine efficiency savings. It is why productivity in the British economy per capita is actually much lower than in most European countries despite the fact that we work, on average, much longer hours. We shouldn’t bring this into the public sector.
Such false economies by employers(coupled with the corrupt practices of the financial services sector – e.g. taking 25p of each pound invested in your pension, then employing a fund manager who takes 25p themselves and kicks back 10p to the pension company for the business, leaving only 50p to invest in your retirement) explains why private sector pensions are so poor.
We should not be looking to bring the lazy ideas, incompetence and corruption of the British private sector into the public sector.
We certainly shouldn’t be viewing it as a model!
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All politics is about resentment and envy. The problem for the public sector is that there are more people in the private sector with ever-decreasing wages and pension rights. And they increasingly know it even if the BBC distorts the facts.
They use a fireman having to pay more for his pension as an example but they omit mention of his salary.
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Those who work in the public sector, do so by choice. They were not forced or coerced into their chosen career path. What they fail/refuse to accept is that their wages come out of public money. Whether this be through rates or whatever, so are they saying that we should pay more to perk up their already generous pension schemes and in the end doing without ourselves? Public sector workers contribute absolutel;y nothing financially to the economy so I for one do not support their action.
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Blade, I like to keep my responses on this blog as polite as I can but you are testing my resolve not to explode into abuse.
‘Public sector workers contribute nothing financially to the economy’
You mean apart from paying tax & NI like the rest of us and of course VAT on all they consume?
In fact, the government reckons this group of workers taking a day to protest is going to cost £500m, which is presumably what they contribute every day one way or another
And while their jobs might not make money directly, it is hard to think how the economy would survive without them.
Take away the teachers and your workforce is uneducated. Take away the nurses and doctors and the workforce is ill. Take away civil servants and government collapses. Take away refuse collectors and the nation disappears under massive mound of rubbish.
You get the drift.
We pay PS workers out of taxpayers money because we employ them to do what taxpayers want done. Are you suggesting their jobs should be voluntary while the bankers get paid for their exemplary contribution?
You are an expletive, expletive, rude name. Sorry couldn’t hold it in any more.
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Saltaire Sam writes, in reply to Blade:
“‘Public sector workers contribute nothing financially to the economy’
You mean apart from paying tax & NI like the rest of us and of course VAT on all they consume?”
I’m afraid Blade is correct. All the tax, NI and VAT paid by Public Sector workers, is paid out of the money previously paid to the Public Sector, by the Private Sector, in taxes.
You cannot get away from it: Public Sector salaries are paid entirely out of the taxes collected by Government. That Public Sector workers then pay some that Private Sector tax BACK to the Government, in the form of their tax payment, does not detract from the fact that the money came from the Private Sector in the first place.
In fact, the Government is unable to collect enough tax to cover all the salaries of Government employees, and has to borrow £15,000,000,000 EVERY SINGLE MONTH from the bond market just to pay those wages.
“And while their jobs might not make money directly, it is hard to think how the economy would survive without them.”
That is absolutely correct. We cannot survive without these services.
So there has to be a balance, right?
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Mars, of course there has to be a balance but at the moment the balance always seems to be to the detriment of public sector workers.
Only today, Osborne has announced that PS workers, whose wages have been frozen i.e. reduced for two years, will only get a rise in future well below the rate of inflation. And out of that they have to pay higher pension contributions. And the latest forecast is that 750,000 of them will lose their job through no fault of their own
The balance comes from cutting expenditure in other places – my preference would be to save £26bn on trident – collecting all the tax due from individuals like Philip Green (estimated avoidance £300m) and companies like Vodaphone (£10m), and legislating to stop the 1% giving themselves massive rises.
Those inflated private wages and bonuses are also paid for by tax payers. Each time your bank rips you off with charges, it is you as an ordinary tax payer who pays for it out of your nett income. Personally I’d rather support a fireman, nurse, refuse collector etc who make my life better than those bloated swindlers who helped bring about the financial crash.
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Sam, your first response to Blade here was everything i wanted to say when i read the comment so thank you for saving me the bother.
But i now have to respond to Mars’ assertion that the govt borrow £15 billion a month just to pay public sector wages!
Where does that figure come from? There must be some very highly paid workers somewhere (even accounting for the inflated salaries and expenses of ministers!).
I can only assume if they are already having to borrow to pay wages of those working in the services we pay our taxes to have, every other bit of spending – capex, payments to europe, foreign aid, military etc etc is also borrowed? Perhaps we need more tax take, so it really is time to go after those tax dodgers, none of whom work in the public sector methinks.
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I do support nurses and fire fighters etc as I would do with anyone who work rediculous hours or put their lives on the line. As for teachers, they are in no way in the same league of those in the professionprior up to the end of the 1960′s. Perhaps not their fault the way governments have meddled with the education system. But the fact is they just are’nt of the same mould.
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sue_m writes:
“But i now have to respond to Mars’ assertion that the govt borrow £15 billion a month just to pay public sector wages!
Where does that figure come from?”
The monthly borrowing figure varies a bit each month. £15 billion is a ball-park figure.
See http://www.bbc.co.uk/news/business-15000130
The figures are published by the Office for National Statistics
“There must be some very highly paid workers somewhere (even accounting for the inflated salaries and expenses of ministers!).”
You should multiple the average public sector monthly salary by the number of Government employees.
“I can only assume if they are already having to borrow to pay wages of those working in the services we pay our taxes to have, every other bit of spending – capex, payments to europe, foreign aid, military etc etc is also borrowed?”
Yes, the regular monthly borrowing covers all the Government expenditure which exceeds its monthly tax take. But note that the military expenditure includes the salaries; they are Government employees, after all.
These comments allow a few hundred characters only – insufficient to cover all the details, I’m afraid…
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Mars, there is no way that article proves what you are saying – it is referring to one particular month not every month. It also talks about the previous month being a surplus (and a long way out on the estimates) and other ‘changes’ due to local government data. It is also concerned with total govt borrowing not its wage bill alone. You cannot lay govt incompetence at the door of public sector workers.
In fact, the link is a good example of how statistics can be manipulated and how little govt, the ONS and city analysts really know about how much they are borrowing. Quite shocking.
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sue_m writes:
“Mars, there is no way that article proves what you are saying – it is referring to one particular month not every month.”
The PSBR for 2010/11 was £143.2 billion (11.7% of GDP). The forecast for 2011 (made in October) varies between £110 billion and £146 billion. It has recently been revised upwards!
As I said, the monthly rate varies, and the latest, (corrected) monthly deficit was actually over £15 billion. The reason this figure changes is because of late receipts.
It covers ALL expenditure, and that includes all salaries paid by HMG. If the Government could not borrow each month, then it simply could not meet its bills for public sector salaries. That is why total Government spending is being cut, which includes its wage bills.
Our cumulative total national debt (from all this monthly borrowing) stands at £966.8 billion, for which we have to pay interest every month.
http://www.hm-treasury.gov.uk/d/201110forecomp.pdf
http://www.economicshelp.org/blog/334/uk-economy/uk-national-debt/
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The latest Public Sector Borrowing Requirements for November 2011 have just been published: an eye-watering £18.1bn.
That is another £18.1bn to be added to the £992,930,000,000 which we already owe! And that is EXCLUDING the “Bank Bailout” figures.
See: http://www.debtbombshell.com/
all brought to us by the caring, sharing Labour Government… Now, just where is all that “extra spending” the Unions demand, to come from?
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I was raised through the education system of the 50/60′s, and wow, what a difference to the present day! To say that teachers contribute to industry via the education is a joke. The education standards in this country is among the worst in the world. We have school leavers applying for university places who can’t spell correctly, maths levels are down adn some even fill in their applications using mobile test speel. I would maybe support teachers if they started doing their jobs properly!
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Blade, I too was educated in the 50s and 60s and one of the lessons I recall was about people in glass houses.
If you are going to make sweeping accusations about education standards being ‘among the worst in the world’ (proof?) you should at least check your mis-typing of adn and calling text spiel test speel.
Are you really claiming today’s kids would be even better off without teachers?
Many of our generation who benefitted from a grammar school education think things might be better if they were brought back. But an even larger number who were dumped as ‘failures’ aged 11, disagree.
One of the answers to improved education is smaller class sizes – shown by the results achieved by private schools – but that would mean even more tax payers’ money being spent.
I’m always intrigued to see private sector businesses welcoming public money being spent on infrastructure like road and rail even though they are reluctant to pay their full share of taxes to pay for them.
The truth is that we need both private and public and workers in both deserve decent pay and pensions that don’t leave them scraping the barrel in retirement.
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How black and white your world is Blade. Do you really believe ALL teachers are useless? What about nurses or firefighters are they useless too or is it ok to penalise them because like the useless teachers they work in the public sector?
Despite your superior education your view of the world seems somewhat narrow.
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Saltaire Sam writes:
“Those inflated private wages and bonuses are also paid for by tax payers.”
They may be paid by tax payers but they not paid out of tax.
“Mars, of course there has to be a balance but at the moment the balance always seems to be to the detriment of public sector workers.”
That is because the previous Government decided to borrow money from the bond market every month in order to fund increasing numbers of Government employees, and to fund their salary increases. It is not the public sector workers’ fault that they did this, but it cannot continue indefinitely (see what happened to Greece). Ultimately, we know who will bear the price of that Government doing that.
I happen to agree with you about Trident (its replacement has been postponed until after the next General Election) and I agree about ending tax avoidance. We need a political party to come up with a real scheme to end it, rather than just mouth words.
The public sector are not the only ones who are going to have to “mark time” until we reduce our structural deficit, and the global economic crisis has eased.
I’m a pensioner, and I am marking time, BIG time.
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If you are waiting for the global economic crisis to ease then you’ll be marking time forever more. The crisis was caused by reckless banks catching complacent governments unawares and then blackmailing them into bailing them out against all the rules of ‘market forces’ that they love to spout about.
They then continued to operate recklessly whilst siphoning off billions of pounds to a small clique of individuals and bringing us all closer each day to the second big crash. At which point taxpayers will be expected to bail them out again. And the current complacent govt’s allow them to do this.
This is the private sector ‘wealth generating’ machine at its highest. I’d rather bail out a nurses pension than a bankers bonus.
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First of all I don’t think it makes sense to base a claim that public sector pensions are overly generous when compared with those of the private sector, unless you’re among those whom even Danny Alexander called, ‘the misguided voices who seem to think that the pubic service should be the forerunner in a race to the bottom.’
I think it’s perfectly acceptable to fight to maintain a scheme that works at the moment to preserve the dignity in retirement of all public servants, people who work to maintain an essential infrastructure driven by basic human needs rather than profit. Why should we let the market and its relatively meager employee pension contributions dictate what’s fair even in the current economic climate? The fact that David Cameron won’t budge because he has the backing, he hopes, of the majority of private sector employees is contemptible. Let’s calculate the true objective fairness in terms of quality of life an average or even better than average public service pension affords in old age? The math seems easier and more appropriate than trying to draw comparisons between private and public sector earnings and the resulting unworthiness of the public…
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There have of course been massive demographic changes over the past few years but these changes have impacted the public services just the same as the private sector, if not worse in many respects. I can only speak from my own experience, but I know (as a college lecturer) I have it harder than those that went before me, not least because I have to ‘entertain’ a growing proportion of students who are in education, not though a desire to learn or ambition to move into higher education or more worryingly, because they’re interested necessarily, but because there’s nothing else to do; and for that I can hardly blame them.
If David Cameron does get the support of the public; and this seems to me to be reminiscent of the kind of short-sighted right-wing approval that worked so well in that great equaliser that took education and held it up as a short cut to better pay, rather than see its intrinsic value to society as a whole, then, just like the £9000 a year tuition fees it will indeed be a race to the bottom.
Then there’s the deficit that many see as the real reason for the changes. A deficit brought about by the governments ineptitude and cowardice in creating…
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Iam afraid the contributers above have been making a ‘pigs ear’ of the debate on public sector pension costs. The figure is the folowing: The black hole in public sector pension scheme is set to widen by £10billion in THE NEXT FIVE YEARS.Now children stop arguing about a ludicrous 10billion per month! If that were the case we’d be already well into a state of utter melt down. The facts are we cannot afford paying out so much to state workers unless we have a death wish as a nation. Perhaps those public employees complaining as regards their future pension should strike for a pension comperable with the private sector salary levels. And please don’t again bring in the relatve few high paid top bankers.I don’t think many against the public sector cut backs in wages,numbers and pensions realise ,or want to, the predicament we are heading into unless there is a drastic cut back in public spending. Do they wish us to end in the situation of Greese,and the many other countries who are in danger of heading their way? We have a union baron on Channel4News,right now, arguing that what is needed is the same pension rights for all workers. They just don’t get it.You’d think we riding…
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“The facts are we cannot afford paying out so much to state workers unless we have a death wish as a nation.”
What we cannot afford to do is place blame or cut the wages/pensions of people who aren’t responsible for the financial crisis. Why is no-one insisting that we plug the holes by taking back the money that was given to the banks? And do not tell me the money isn’t there when there are going to bonus payments in the billions. This should not be about public vs private, but we are letting the government drive a wedge between us, most probably to the detriment of all of us.
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Sargrith writes:
“I am afraid the contributers above have been making a ‘pigs ear’ of the debate on public sector pension costs. The figure is the folowing: The black hole in public sector pension scheme is set to widen by £10billion in THE NEXT FIVE YEARS.Now children stop arguing about a ludicrous 10billion per month! If that were the case we’d be already well into a state of utter melt down.”
You obviously have not the faintest idea what you are talking about.
Study these tables and say that current net borrowing does not exceed £10 billion per month!
http://www.guardian.co.uk/news/datablog/2010/oct/18/deficit-debt-government-borrowing-data
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Chris writes:
“What we cannot afford to do is place blame or cut the wages/pensions of people who aren’t responsible for the financial crisis.”
They are not responsible, as you say. It was the Labour Government who started borrowing obscene amounts of money to pay for all its schemes and benefits. However, to reduce that borrowing, this Government has to cut something. It has said it will not cut overall NHS spending or Foreign Aid, so the rest has to bear the price.
“Why is no-one insisting that we plug the holes by taking back the money that was given to the banks? And do not tell me the money isn’t there when there are going to bonus payments in the billions.”
The money used to bail out the banking system (again, borrowed) is NOT counted when calculating the structural deficit (the PSBR or PSNB) or the accumulated National Debt. If we add the bail-out money to the figures, the UK is more that two trillion pounds in debt!
So, I’m afraid, paying that money back to the lenders STILL leaves our National Debt at £996.8 billion!
We are in deep financial trouble. It is very serious. Of course, paying the bail-out money back would cause most of our…
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Mars, while you are right to say that the government needs to act, it is still a matter of choices and currently Osborne and Cameron are choosing to take the money from the less well off.
The extra pension contributions from PS workers will, like national insurance, go not into their pension fund but the general pot.
Meanwhile tax dodgers etc continue to thrive and we continue to waste billions on unnecessary wars and nuclear weapons.
We could even raise millions by selling off chequers and the other grace and favour properties so beloved by ministers but which cost the rest of us to run.
What we need is a thorough, dispassionate audit of what is spent and anomalies in what is collected (vodafone) and I bet the deficit could be sorted without robbing teachers of their pension
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Mars, you seem completely taken in by the govt line.
As you are so keen on facts (i use the term loosely) and figures (which don’t necessarily back up your argument), are you aware that 37k of taxpayers money has just been spent on a painting and coat of arms for the Speaker? Add that to the running costs of all the grace and favour palaces that Sam mentions above and maybe you will begin to understand why some of those figures are so high and where the additional public sector ‘pension’ payments will be going.
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“Saltaire Sam
Mars, while you are right to say that the government needs to act, it is still a matter of choices and currently Osborne and Cameron are choosing to take the money from the less well off.”
Well, they have raised the Personal Allowance, which takes more of the poorest out of Tax, they have reduced Child Allowances for the higher paid, they have not raised the threshold for the highest tax band in line with inflation, and they have kept the top rate of tax.
I am not sure they are perfect, but I still remember the Labour Government replacing the 10p tax rate with the 20p tax rate, and not reducing the Child Allowances for the higher paid.
“The extra pension contributions from PS workers will, like national insurance, go not into their pension fund but the general pot.”
There is no pension fund for the vast majority of the public sector. Public sector pensions are paid out of “the general pot” as you call it.
“Meanwhile tax dodgers etc continue to thrive and we continue to waste billions on unnecessary wars and nuclear weapons.”
Labour also failed to properly tackle “tax dodgers” and wasted vast amounts on failed computerisation projects,…
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Mars, I’m always surprised when politicians and their followers use the argument that their opponents also failed to solve a particular problem.
I’ve yet to read a manifesto that says we won’t be any worse than the other lot.
Surely Cameron and Osborne claimed they would be better at solving problems? They said they would fix the tax loopholes. Instead they have gone for the easy targets, the people who don’t vote for them anyway and who, in the words of the OWS banner, ‘can’t afford a lobbyist.’
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Saltaire Sam writes:
“Surely Cameron and Osborne claimed they would be better at solving problems? They said they would fix the tax loopholes. Instead they have gone for the easy targets, the people who don’t vote for them anyway…”
Labour said it would close tax loopholes, and Osborne has said he will close tax loopholes. Both had some success, but it is easier said than done.
Labour do not have any explanation on how they would close a tax loophole which Osborne has yet to tackle.
Given that the Coalition has tackled some loopholes, then it is untrue to claim that they are doing something else *instead*, such as your “easy targets”. They have increased Capital Gains Tax. Now, why didn’t Labour do that? They have reduced Child Tax allowances for the the higher tax bands. Why didn’t Labour do that? They have declined to increase tax allowances in line with inflation for the higher tax bands. Why didn’t Labour do that? They have increased the lower tax band way beyond the rate of inflation. Why didn’t Labour do that? They have guaranteed State Pension increases to be the higher of inflation, wages or 2.5%. Why didn’t Labour do that?
Just…
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Mars Express.
You have the gaul to take me (arrogantly) to task by stating “You obviously have not the fantest idea what you are talking(sic)(writing) about”. This over my following statement: “The black hole in the public sector pension scheme is set to widen by 10 billion in 5 years”
Your insulting comment had,it appears, been mixed up with a previous dispute with sue_m over a 15 billion figure in respect of government borrowing to pay public sector wages per month. One comment from Sue_m commenting on one of your statements suggested there must be many very highly paid state employees given your figures. So what conection did my comment about a black hole in government borrowing set to widen in the next five years have to do with your ongoing dispute with sue_m? Having read your comments it seems you have been getting variouis figures all mixed up, and juging by sue_m replies I’m sure she thinks the same. you appear to have been reading too many issues by The Office of National Statistics and the National Association of Pension Funds.And nodoubt many others. Have a re read of your gobble de goo. Although can’t say it makes informative reading and certainly not…
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Sargrith writes:
Mars Express.
You have the gaul to take me (arrogantly) to task by stating “You obviously have not the fantest idea what you are talking(sic)(writing) about”. This over my following statement: “The black hole in the public sector pension scheme is set to widen by 10 billion in 5 years”
But that is not ALL you wrote, is it?
You continued “Now children stop arguing about a ludicrous 10billion per month! If that were the case we’d be already well into a state of utter melt down.”
No one else had mentioned “10 billion”, other than in the context of the PSBR.
Go and check, provide the quotes.
And despite your illusions, we do have to borrow more than 10 billion pounds sterling every month to cover Government spending, a huge part of which is salaries.
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Saltaire Sam.
All taxes go into the exchequer.Alway have, but of course can be allocated according to any agreed increase in a given sector. As for a pension pot,you don’t have one in the public sector. It is paid on the basis of your length of employment and salary grade.Rather like the final salary pension Gordon Brown helped to put paid to in the private sector by stopping the pension credit.Thanks for nothing useless Gordon. As for selling off chequers,what would that pittance achieve? It’s in the category of any other one offs, which are, in the massive financial scheme of things, fairly pointless. The cut backs need to give a reduction in spending to get the deficit down and keep it their. And by the way, has anyone got a good idea as to how we stop the Far Eastern countries from fast becoming the manufacturing power house of the world? now why was I sure Mars had the answer to that? Yes, I also know.We can’t.But we can be initiative,Invetive, and by advancing technology. One things is for sure,we won’t recover by paying anyone more than we can afford.And one last observation:Yes the public sector do pay taxes, but unlike the private sector they come from our taxes…
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Given size and location of most grace and favour properties I suspect they would raise more than a pittance plus the country would save millions in annual running costs. As the govt’s favourite catchphrase keeps telling us we are in ‘tough times’ sacrifices have to be made.
Interesting argument that one-off sales are pointless – perhaps someone should mention that to Osborne before what’s left of council housing is sold off (truly for a pittance). Or any of the other public assets in the firing line.
I am sure entertaining foreign dignitaries could easily be done at one of the royal residences. In fact, I would remove all the pomp and ceremony from politics altogether as it clearly gives the MPs an over-inflated view of their own importance and makes them believe they have a special right to waste public money. Hence the speakers portrait and coat of arms – and all the other extravangances to appease their egos that we don’t necessarily hear about!
We have a perfectly good head of state who attracts tourists to this country which helps generate wealth. MPs and those in the Lords are merely parasites who suck wealth out of the economy.
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It is easy to not fully understand what is the truth when you get alternate views depending on your stance. First of all there are several levels to public sector pensions. The Conservatives are giving only the best ones, which I do agree should be reduced, however the pensions he after are not these and not his own I might add. Then there are pensions of the ordinary person who doesn’t earn more than there private sector equivalent. Yes he/she has a good pension but no where near as good as MPs and non contributary Whitehall pensions. Most of the other pensions are contributary pots not held by the treasury but a private company and have a surplus i.e. are self sustaining to their members very similar if not the same to private sector final salary schemes. Is it right that the government should be able to take money from these?
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Darthpoik writes:
” … Most of the other pensions are contributary pots not held by the treasury but a private company and have a surplus i.e. are self sustaining to their members very similar if not the same to private sector final salary schemes.”
If that is the case, you will be able to give the names of these pension schemes, won’t you?
That way we can find out what their status is.
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sue_m
Why not the royal palaces.(all of which you seem to have conveniently forgotten when selling off almost everything else). Now that is a saving on an ongoing cost given all the staff and maintenance. Or was that a savings too far? Were the original council house sales also such a bad deal. Think of the savings made since, given that many of those same houses would have been drawing from the tax payer in the form of council house credits as many would surely have gone at some time into the hands of those who could not,or would not, pay rent that included rates.
Lord Hutton has very recently warned that the Government reforms to public pensions are “heading for the rocks”.He said Government measures may not go ‘far enough’ and his review of the system now looked ‘too optimistic’after the country’s growth forecasts were downgraded.
Figures released by the independent Office for Budget Responsibility show tax payers will have to pour in an extra £10 BILLION over the next five years to keep public sector pensions afloat! Don’t tell that bright shaft of light Mars Express or we’ll hear,yet again,of the, (incorrect) 10 Billion borrowed each month for salarys.
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No Sargrith not forgotten Royal properties – see my comment above about maximising their value by using for visiting dignitaries.
There is probably room for some trimming of the civil list (again) but personally I think the core Royal Family bring a lot to this nation – look at how the wedding this year brought people together and boosted business and tourism. We need to have a head of state and i would much rather it was the Queen than some chinless wonder hand-picked by the govt of the day. This person would also cost vast sums to maintain – as do politicians – but would not bring anything to the party.
Who would want to watch ‘President Nobody’s’ son get married?
Were the council house sales such a bad deal? Not for those families who bought them dirt cheap but bad for the next generation struggling to find somewhere to live and left with private rented as the only option. Bad also for the taxpayer who in many cases has subsidised private landlords extortionate rents as more and more people claimed housing benefit.
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Sargrith writes:
“Figures released by the independent Office for Budget Responsibility show tax payers will have to pour in an extra £10 BILLION over the next five years to keep public sector pensions afloat!”
Not quite right: the OBR actually forecasts ( Table 4.19: Changes to total managed expenditure since March forecast) Net public service pension payments of -0.2 1.4 2.2 2.5 2.9 2.8 for the years 2010-11, to 2015-16, giving a total CHANGE in forecast of £11.6 billion over five years.
“Don’t tell that bright shaft of light Mars Express or we’ll hear,yet again,of the, (incorrect) 10 Billion borrowed each month for salaries”
You really are incompetent at reading OBR and Treasury accounting information, aren’t you?
From the OBR “Economic and fiscal outlook – November 2011″ (the same source as above):
Executive Summary 1.4 “Public sector net borrowing (PSNB) is expected to total £127 billion or 8.4 per
cent of GDP this year, slightly higher than we predicted in March.”
That averages at over £10 billion per month (currently running at over £15 billion per month)
So what do you think that monthly PSBR is for then, if it is not for…
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The last Tory Gov (which ended in 1997) encouraged public sector to dish out phoney ‘ill-health’ and early enhanced pensions to all & sundry. It was such an embarrassment that even the Audit Commission, itself manned with dozens of people on that fiddle themselves, reported in 1999 that public sector had developed a ‘retiring nature’ and early bungs were stopped by the new Government of the day. Great consternation!!
We’re all STILL PAYING for that TORY PROFLIGACY now! Those over-paid pensions are costing us a fortune!
What’s needed is an even more radical reform that takes into account the higher NIC that provides for SERPS, tax & the NIC relief to employERS & ‘EES for their pension contributions.
Please note Cathy: DC pensions do NOT QUALIFY for the lower rates of NIC and payout an higher State pension too. Taking that into account the differences are not as great as you project.
That said, it’s now better to avoid annuities by just putting your cash into an equity fund and drawing down on that instead. Much more tax-effective too!
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