Families face £1,200 bill for public sector pensions

[TrueBlueTerrier]

Families face £1,200 bill for public sector pensions as expert reveals 80 per cent of funds is paid for by taxpayer

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Families face forking out more than £1,200 a year to fund Britain’s public sector pensions within five years, according to a report.

Figures produced by a leading pensions expert for the Centre for Policy Studies show that four out of every five pounds paid into the pensions for public workers will be funded by the taxpayer.

Michael Johnson revealed that the shortfall between public sector contributions and pensions that were already being paid would rise 77-fold in 11 years.

The gap will reach £15.4billion in 2016-17, up from only £200million in 2005-06.

Taxpayers will be left footing most of the total bill of public sector pensions to the tune of £32billion or £1,230 for every household in the country.

Employers will meet the rest, around £17.2billion.

Experts warned that another round of cuts to the scheme would be required before 2020 - a move that would risk another showdown with the unions.

In his report, The Approaching Cashflow Crunch, Mr Johnson warns that the Coalition’s reforms would take up to 30 years to reap significant savings.

Three factors have been blamed for a worse-than-predicted shortfall: the public sector wage freeze which meant lower contributions for pensions, more lump sum payments due to a rise in public sector redundancies and the taxpayer having to meet Royal Mail’s £1.5billion extra pensions shortfall.

Mr Johnson warned that once the reforms had been weakened in the face of resistance from state workers, ‘public sector pensions will remain unsustainable’.

‘It is therefore time to consider a solution that will be lasting, affordable and fair,’ he added.

Mr Johnson called on the Coalition to put all its calculations for the reduction of the public liability into the public domain.

He urged ministers to prepare the public sector for a ‘risk-sharing arrangement’ to make them carry more of the burden.

A Treasury spokesman said: ‘The Government’s reforms will nearly halve the cost of public service pensions, saving £430billion, to deliver long-term sustainability. Fairness is also at the centre of our reforms – for instance, increased member contributions will save around £3billion a year by 2015.’

[Kidders]

I really hope our people take notice of this, never mind van sharing, bag weights, special leave etc
This is our future, our retirement plan, its what we have worked for...............ITS OURS........by right.

Don't rob my pension, its mine, i've earnt it.

[NWpostie]

Those same house holders got a lot more back in reduced taxes for the past 20+ years subsidised by the profit of Royal Mail especially under Thatcher, we used to be poorly paid when compared to the private sector, the compensation for that was a guaranteed pension backed by Royal mail, now the private sector are complaining that we are paid more than them, I didn't hear the protesting how low paid we were for years compared to them.

Such hypocrisy

[baldrick]

In Spain and Greece pensions have been cut by 20%. The Government here would like to do the same with public sector pensions. They are always going on about 'gold plated' public sector pensions being higher than in the private sector.
Of course when the economy and stock market were booming, annuity rates were higher and nobody said public sector pensions should be increased.
There will be more and more propaganda about public sector pensions being 'unaffordable' and I wouldn't be surprised to see proposals for them to be cut, or perhaps frozen, in the next few years.