Public Sector Pensions - Today's Times

[JackanorySFC]

because of maggie, that is why

 

To be fair thats a better reply than the usual "Blair was a tiry" response. It's like the years 97-10 never happened?

[rocknrollman no2]

One question. If it's the nasty Tories that love to hit the poorest hardest, why after 13 years of labour government did the gap between the richest and poorest get bigger than it's ever been?

Good point and i think the answer is because new Labour took on a lot of Tory policies.

But i have a feeling that not only will that gap get a lot bigger under the Condems,also things will become a lot worse for everyone in general.

[JackanorySFC]

Good point and i think the answer is because new Labour took on a lot of Tory policies.

But i have a feeling that not only will that gap get a lot bigger under the Condems,also things will become a lot worse for everyone in general.

 

How many more tears should labour have had to turn these inherited Tory policies around? Obviously 13 isn't enough so 20, 25?

[rocknrollman no2]

How many more tears should labour have had to turn these inherited Tory policies around? Obviously 13 isn't enough so 20, 25?

Well Thatcher had three turns in power and Major another two after her and things didnt get any better under them?

[shurlock]

One question. If it's the nasty Tories that love to hit the poorest hardest, why after 13 years of labour government did the gap between the richest and poorest get bigger than it's ever been?

 

The evidence is that though things didn't get significantly better, they didn't get a whole lot worse under Labour. Had the Major government’s policies been maintained, child and pensioner poverty rates as well as inequality would have been much higher - see the work of the Joseph Rowntree foundation. Obviously, slowing the rot is hardly a ringing endorsement but Labour did make a difference, even if, ultimately, it was nothing like enough of a difference.

[AndyNorthernSaints]

Remember when teachers, nurses, doctors, nursery education officers, school support staff, librarians, social workers, care assistants, bin men and lollipop ladies crashed the stock market, wiped out banks, took billions in bonuses and paid no tax? No, me neither.

[Lord Duckhunter]

Remember when teachers, nurses, doctors, nursery education officers, school support staff, librarians, social workers, care assistants, bin men and lollipop ladies crashed the stock market, wiped out banks, took billions in bonuses and paid no tax? No, me neither.

 

What a ridiculous argument. I didn’t start the Iraq war, can I withhold a portion of my income tax?

 

People without kids have to pay for other’s children to be educated.I have to pay for people on the dole, despite never having claimed it. How do we sort out the finances if only the people who caused the deficit are the ones who pay?

 

Your socialist utopia seems to mean everyone sharing the benefits of a free market economy, but only the Private sector paying the costs when it goes wrong.

[Viking Warrior]

Its all to to easy to have a pop at the public sector. The people doing all the shouting are the Trade Unions and a few of their 1970'2 red ken and arthur scargill types. The majority of public sector workers are well aware of the economic problems facing eachworker. and they are hoping they have a job to go to in the future. The Unions must have loads of cash if they think they can afford £30 a day strike pay. How much has it cost the unions in southampton with the bin bods currently on strike? Oh I forgot, when they come back they will be paid double time to clear it up. I agree there is waste, Take shetland , they have to save between 15 and twenty million next year on top of this years costs. Jobs will go. but what makes it stupid the elected members have voted to build a £100,OOO skate park, Surely that is one luxury that is not needed?

 

Another waste is the sick pay allowance. that needs a radical overhaul as it is open to abuse and it only takes a very short time to get your full allowance re-instated even after you have already had six months full and six months have pay. Its important the genuine sickness absence employees are looked after though.

[aintforever]

This is a tough one, through my job I have seen public sector wastage first hand and it is annoying how some seem to think they have a god given right to a secure job and gold plated pension whilst I have little job security and can't even afford a pension.

 

BUT, many of those effected are going to be the low paid and it doesn't seem fair that they should pay for the bankers mistakes, especially as the banks continue to rake in billions in profits and hand out billions in bonuses among themselves.

 

IMO the worlds economy is about to go through a massive re-adjustment, it's simply not sustainable. Too many people taking millions without contributing any value to society.

[trousers]

Remember when teachers, nurses, doctors, nursery education officers, school support staff, librarians, social workers, care assistants, bin men and lollipop ladies crashed the stock market, wiped out banks, took billions in bonuses and paid no tax? No, me neither.

 

Only 74 of my Facebook "friends" have posted that mantra so far today

[trousers]

http://www.telegraph.co.uk/finance/personalfinance/comment/8583678/Ill-swap-my-pension-for-a-public-sector-one-like-a-shot.html

 

We should all be jumping for joy that we are expected to live longer. Yet it doesn't seem that way. On the face of it, it would appear that we would all prefer to have shorter lives in exchange for having a little more money in our pockets.

 

Or is it that we don't expect to live that long at all. According to the Government, we all underestimate how long we can expect to live.

 

Those in their twenties underestimate their life expectancy by at least eight years – even the over-fifties live four years longer than they expect to.

Increasing longevity is one of the pivotal reasons why final salary pensions are under strain. It is why most schemes in the private sector have closed down and it is why the Government wants to overhaul public sector pensions.

 

Yet more than 750,000 workers will strike this summer because they don't want their guaranteed pensions touched.

 

Unions argue that they should not shoulder the blame for the financial crisis because it had nothing to do with them. They argue: "The very modest pay and pensions of public servants did not cause the recession, so they should not be blamed or punished for it."

 

It would seem that those in the public sector continue to believe that the entire private sector dabbled in toxic debt and is somehow responsible for the huge deficit Britain finds itself in.

They also forget that the public versus private sector pensions debate has been bubbling away for years. The issue of how to sustain public pensions would have had to come to a head, deficit or no deficit.

Increasing longevity and the realisation by actuaries that generous unfunded pension schemes are no longer viable continues to pass many in the public sector by.

 

Longevity is accelerating so rapidly that siblings born a year apart can now expect a six-week difference in lifespan. A baby born this year will, on average, live for more than 90 years and nine months.

 

As a result, more than 11 million people alive today – 17.6pc of the population – can expect to live to more than 100 years old. You do not need to have a GCSE (or a CSE, for that matter) in maths to see that more people in retirement and more people living longer is going to cost more.

 

As it stands the taxpayer's contribution to a public sector pension is double the amount paid by the worker. Teachers, for instance, argue that their pension scheme is in good shape and so it doesn't have a problem, yet according to Lord Hutton the taxpayer stumps up 14pc into a teacher's pension pot, while the teacher pays 5pc.

 

Is that fair? Private sector workers are being encouraged to plough in more of their earnings to fund their inferior pensions, yet they are expected to help fund someone else's too.

 

Money pages in newspapers have told tales over the past few years of private sector workers being told their final salary scheme is to be closed and that from now on they will have to pay into an inferior, defined contribution scheme (DC). These DC schemes are linked to the ups and downs of the stockmarket, the amount they put in and annuity rates when they retire.

 

In short, private sector workers have had the mockers put on their retirement plans midway through their working lives. Not that people seem to care. There has been no outpouring of anger, emotion or sympathy on their behalf. Perhaps private sector workers are just not caring enough?

 

Yet the Government is not proposing to shut down public sector final salary schemes. With its plans, workers will still get a guaranteed pension for life with a career average scheme – and that is a pension not to be sniffed at.

 

Indeed, those on lower salaries could actually be better off under a career average scheme. A worker starting on a salary of £15,000 and with a future earnings growth of 1pc above CPI each year, would have a pension 21pc bigger than under a final salary pension.

 

And I'll tell you this – I'll swap my DC scheme for a career average final salary scheme any day of the week."

[trousers]

(sorry, didn't mean to copy the whole article...iPhone giving me some grief)

[swannymere]

I'd vote for paying lower taxes if i promised to 'off' myself at 70 before becoming a tax burden to my children and grandchildren.

[sotonjoe]

What a load of old tosh being spouted here as usual. The only thing that's clear here is that there are plenty of people happy to shoot their mouths off without knowing the facts. Peopl should really go out there and read up on subjects like this before getting stuck in.

[swannymere]

What a load of old tosh being spouted here as usual. The only thing that's clear here is that there are plenty of people happy to shoot their mouths off without knowing the facts. Peopl should really go out there and read up on subjects like this before getting stuck in.

 

Which are? As far as i know we now live longer, which means people spend more time in retirement which somebody has to pay for, who pays?

[sotonjoe]

Which are? As far as i know we now live longer, which means people spend more time in retirement which somebody has to pay for, who pays?

 

Where do I start?!!!!>>>>

 

 

A lumping of public sector pensions into one category when, in reality, there are many different schemes for different professions which deserve to be treated individually. Sweeping generalisations about private and public sector pay and pensions. Claims that teachers have pay rises every year. Ignorance to the fact that the TPS was altered in 2007 to increase affordability. Assumptions that all public sector pensions aren't affordable when these things haven't been properly assessed.

[swannymere]

Fair enough, but whilst most of the private sector have had to take a cut in pay, a pay freeze or pension contributions being stopped do the public sector think they should be immune, it's almost like they think they're above it all.

[bridge too far]

Fair enough, but whilst most of the private sector have had to take a cut in pay, a pay freeze or pension contributions being stopped do the public sector think they should be immune, it's almost like they think they're above it all.

 

Unless you never, every buy anything or pay anything (I'm thinking insurance, food, white goods, cars.......) you are, unwittingly, contributing to the someone's pension.

 

The sad thing though is that the pension you're unwittingly contributing to is more likely to be for a fat cat than it is for the ordinary worker in the business that you're buying from.

[Hedgehog]

Fair enough, but whilst most of the private sector have had to take a cut in pay, a pay freeze or pension contributions being stopped do the public sector think they should be immune, it's almost like they think they're above it all.

 

I think you will find those in the NHS have had their pay frozen, had their pensions reviewed only two years back, and would now be expected to find another 3% of their salary to pay towards their pension. Not an extra 3% contribution on top of what they pay now, but an extra 3% off their wage. So in fact this is equivalent to a 3% cut in wages. Plus they are still taxpayers too. Everyone seeems to think they are getting their pensions for nothing.

[Lord Duckhunter]

Unless you never, every buy anything or pay anything (I'm thinking insurance, food, white goods, cars.......) you are, unwittingly, contributing to the someone's pension.

 

The difference is I get a choice where I spend my money. If I get poor service from Tesco, I'll go to ASDA and if enough people do the same the local Tesco manager will get the sack. How many poor teachers have been sacked?

[LGTL]

The difference is I get a choice where I spend my money. If I get poor service from Tesco, I'll go to ASDA and if enough people do the same the local Tesco manager will get the sack. How many poor teachers have been sacked?

 

It's extremely hard I think to judge a "poor teacher" as it's so subjective. It can't be based purely on exam results, as for some children not even the greatest teachers of the world would have any bearing on their results. Of course if OFSTED rate you as inadequate then their is a problem, but once again that is only the opinion of one person and shouldn't be taken as gospel on the first occasion. Perhaps it's due to unsupportive management teams or a lack of options for behaviour management. They without doubt exist, but it's much harder to weed them out then it would be a Tesco manager with ever decreasing people going to his shop.

[Lord Duckhunter]

It's extremely hard I think to judge a "poor teacher" as it's so subjective. It can't be based purely on exam results, as for some children not even the greatest teachers of the world would have any bearing on their results. Of course if OFSTED rate you as inadequate then their is a problem, but once again that is only the opinion of one person and shouldn't be taken as gospel on the first occasion. Perhaps it's due to unsupportive management teams or a lack of options for behaviour management. They without doubt exist, but it's much harder to weed them out then it would be a Tesco manager with ever decreasing people going to his shop.

 

According to the BBC, in the last 40 years fewer than 20 teachers have been struck off for incompetence in the whole of the UK. It maybe subjective, but surely in any job there are poor performers. Are people seriously saying that there were only 20 poor teachers in 40 years?

[bridge too far]

The difference is I get a choice where I spend my money. If I get poor service from Tesco, I'll go to ASDA and if enough people do the same the local Tesco manager will get the sack. How many poor teachers have been sacked?

 

I'm not talking about the local Tesco manager. I'm talking about the really fat cats whose pensions are worth millions.

 

Even if you stop going to Tesco, you'll still go somewhere else where you'll be contributing to that fat cat's pension.

 

If the diamond encrusted platinum based big boys' pensions were more realistic, there'd be more chance of the workers in those industries getting something decent.

 

Oh and the average public sector pension is between £4K and £8K a year. And, for that sum, the public sector worker would have had to work in the order of 20 years in their sector and would have contributed 6% of their salary to do so. Gold plated my a*se.

[badgerx16]

I think you will find those in the NHS have had their pay frozen, had their pensions reviewed only two years back, and would now be expected to find another 3% of their salary to pay towards their pension. Not an extra 3% contribution on top of what they pay now, but an extra 3% off their wage. So in fact this is equivalent to a 3% cut in wages. Plus they are still taxpayers too. Everyone seeems to think they are getting their pensions for nothing.

You can include Local Government in there as well.

[iansums]

Just had a letter from my daughters school informing us that due to industrial action being taken by some teachers the school will be closed on Thursday.

 

I wonder if the cost of sending out 1000 letters will be deducted from their wages.

 

If they don't want to contribute more to their pensions perhaps they should have NHS care withdrawn past a certain age.

[Hedgehog]

Are you worried about your childs education for one day, or the fact that you will have to provide child care yourself that day? The teachers haven't caused this stand off with the government. And as for removing NHS care past a certain age, should that not apply to those who have never bothered to get a job! The teacher still pays tax towards his/her health care, and also as a taxpayer towards their public pension as well.

[Sergei Gotsmanov]

Are you worried about your childs education for one day, or the fact that you will have to provide child care yourself that day? The teachers haven't caused this stand off with the government. And as for removing NHS care past a certain age, should that not apply to those who have never bothered to get a job! The teacher still pays tax towards his/her health care, and also as a taxpayer towards their public pension as well.

 

Teachers like the rest of us should have to shoulder some of the stress of putting our economy on a sound footing.

[LGTL]

Teachers are not babysitters. Parents are only concerned about finding child care for the day as their regular care will be removed. Tough, quite frankly.

[View From The Top]

Far too many parents put ther careers before their kids and far too may parents use childcare to raise their kids instead of doing it themselves.

 

They then wonder why their kids are f**ked up.

[Sergei Gotsmanov]

Far too many parents put ther careers before their kids and far too may parents use childcare to raise their kids instead of doing it themselves.

 

They then wonder why their kids are f**ked up.

 

I would argue that people put their careers first so that they can give their children the best.

[View From The Top]

I would argue that people put their careers first so that they can give their children the best.

 

I would argue that selfish, self obsessed people have kids then expect others to look after them, educate and socialise them and then complain that the kids have issues despite having abdicating responsability at every opportunity.

[revolution saint]

I would argue that selfish, self obsessed people have kids then expect others to look after them, educate and socialise them and then complain that the kids have issues despite having abdicating responsability at every opportunity.

 

I'd also add that said selfish people can belong to any social class before anyone starts with that particular issue.

[iansums]

Childcare is luckily not a problem for next Thursday. If it was then I would take the day off work. I'm annoyed because my daughter has end of year exams scheduled for that day which will now have to be rearranged. The whole exam process has been a shambles at her school, little or no information for parents, no science exams then they are back on. After her first year at secondary school I can't help thinking that the school and it's teachers are not as great as they think they are.

 

The plain fact is people are living longer and this has to be paid for. Working in the private sector I know that means I will have to work longer and save more for my retirement. I don't like it but there is bugger all I can do about it.

[bridge too far]

I would argue that people put their careers first so that they can give their children the best.

 

I would argue that many parents have no option other than to try to balance parenting and careers in order to provide for their families. I don't believe necessarily in 'careers first to give children the best' because the best isn't necessarily material but rather it's a warm, happy, stable home. Equally, putting children first at the expense of a career can result in a parent (more likely the mother) being out on a limb when the children leave home and the marriage breaks up and the woman has little or no recent work experience.

 

And, by the way, not every family has the option of calling on grandparents / other family members in an emergency.

 

Having said all this, I absolutely support the teachers in what they're striving for - even though my SiL won't be striking. But then he's new in post and doesn't want to upset any apple carts.

[View From The Top]

Childcare is luckily not a problem for next Thursday. If it was then I would take the day off work. I'm annoyed because my daughter has end of year exams scheduled for that day which will now have to be rearranged. The whole exam process has been a shambles at her school, little or no information for parents, no science exams then they are back on. After her first year at secondary school I can't help thinking that the school and it's teachers are not as great as they think they are.

 

The plain fact is people are living longer and this has to be paid for. Working in the private sector I know that means I will have to work longer and save more for my retirement. I don't like it but there is bugger all I can do about it.

 

I'm sure you get up on your hands and knees, wave your arse in the air and take it willingly if you were told you had to pay 50% more to get 30% less back?

 

No? Thought not.

[revolution saint]

Childcare is luckily not a problem for next Thursday. If it was then I would take the day off work. I'm annoyed because my daughter has end of year exams scheduled for that day which will now have to be rearranged. The whole exam process has been a shambles at her school, little or no information for parents, no science exams then they are back on. After her first year at secondary school I can't help thinking that the school and it's teachers are not as great as they think they are.

 

The plain fact is people are living longer and this has to be paid for. Working in the private sector I know that means I will have to work longer and save more for my retirement. I don't like it but there is bugger all I can do about it.

 

Working in the private sector doesn't give you a monopoly on either financial hardship or realism. The difference is that the public sector is more organised and better equipped to argue against changes to pensions that are either unjustified, unfair or can be financed elsewhere. This why this thread has been dominated by the "I've got it harder" brigade - it's because some people resent that others can actually protest and make a difference. The argument shouldn't be that we should all meekly accept what we're told - we should all be pressing for the preservation of rights that we signed up for when we took the job. If some people have the ability to do that then fair play.

 

I don't buy into the argument that we can't afford it - we can.

[Sergei Gotsmanov]

I would argue that selfish, self obsessed people have kids then expect others to look after them, educate and socialise them and then complain that the kids have issues despite having abdicating responsability at every opportunity.

 

You have a very blinkered view of the world outside of your institutionalised teaching world. Its pretty tough out there.

[Sergei Gotsmanov]

Working in the private sector doesn't give you a monopoly on either financial hardship or realism. The difference is that the public sector is more organised and better equipped to argue against changes to pensions that are either unjustified, unfair or can be financed elsewhere. This why this thread has been dominated by the "I've got it harder" brigade - it's because some people resent that others can actually protest and make a difference. The argument shouldn't be that we should all meekly accept what we're told - we should all be pressing for the preservation of rights that we signed up for when we took the job. If some people have the ability to do that then fair play.

 

I don't buy into the argument that we can't afford it - we can.

 

Are you Greek Revolution Saint?

[OldNick]

I'm not talking about the local Tesco manager. I'm talking about the really fat cats whose pensions are worth millions.

 

Even if you stop going to Tesco, you'll still go somewhere else where you'll be contributing to that fat cat's pension.

 

If the diamond encrusted platinum based big boys' pensions were more realistic, there'd be more chance of the workers in those industries getting something decent.

 

Oh and the average public sector pension is between £4K and £8K a year. And, for that sum, the public sector worker would have had to work in the order of 20 years in their sector and would have contributed 6% of their salary to do so. Gold plated my a*se.

can you tell us how many are on 4-8k a year? I doubt that is the average. What is a teachers [pension, or a civil servants?

[iansums]

I'm sure you get up on your hands and knees, wave your arse in the air and take it willingly if you were told you had to pay 50% more to get 30% less back?

 

No? Thought not.

 

I wouldn't like it one bit. But then again the reason those figures (if true) are so scary is because the previous government did not face up to this issue and deal with it but left it for the Coalition. We've heard about the Pension time bomb for years, the true projected value of my pension has been falling year after year and so I've had to ensure I've put extra money away. I'm lucky that I've been able to.

 

You blame this government when you should really be blaming the previous one for not dealing with the issue earlier.

 

And as for revolution "I don't buy into the argument that we can't afford it - we can." well even Labour acknowledge the problem, remember who wrote the initial report, Hutton, a Labour man.

 

3rd and final post on this, please continue the debate without me.

[bridge too far]

can you tell us how many are on 4-8k a year? I doubt that is the average. What is a teachers [pension, or a civil servants?

 

I've done some research for you Nick.

 

The average teacher pension is £9K

 

http://www.guardian.co.uk/society/2010/may/14/pensions-public-sector-reform

 

However, the average public sector pension (because that's what I was talking about) is between £5K - £8K, see: http://www.bbc.co.uk/news/uk-politics-13775278

 

and the average NHS pension is £7K, see: http://www.bbc.co.uk/news/business-11446832

 

NHS pensions are now based on average salary and length of service. And the average shown above is based on 18 years' service. I don't know how many people actually stay with the NHS for 18 years.

[revolution saint]

I wouldn't like it one bit. But then again the reason those figures (if true) are so scary is because the previous government did not face up to this issue and deal with it but left it for the Coalition. We've heard about the Pension time bomb for years, the true projected value of my pension has been falling year after year and so I've had to ensure I've put extra money away. I'm lucky that I've been able to.

 

You blame this government when you should really be blaming the previous one for not dealing with the issue earlier.

 

And as for revolution "I don't buy into the argument that we can't afford it - we can." well even Labour acknowledge the problem, remember who wrote the initial report, Hutton, a Labour man.

 

3rd and final post on this, please continue the debate without me.

 

And Labour don't have a monopoly on wisdom either - I don't vote for them. In many cases comparing the tories and Labour is like comparing chalk with chalk and in any case it's an irrelevancy.

[bridge too far]

Nick, here's an example I've worked up for you:

 

A clerical worker in the NHS, with an average salary of £15K and 20 years service will get a pension of £3750 p.a. and the total contribution that worker will have made to his / her pension over the 20 years' service is £18000.

 

However I do know that many NHS clerical workers will not be able to afford a pension contribution of £900 pa and not many stay with the NHS for 20 years.

[Sergei Gotsmanov]

Nick, here's an example I've worked up for you:

 

A clerical worker in the NHS, with an average salary of £15K and 20 years service will get a pension of £3750 p.a. and the total contribution that worker will have made to his / her pension over the 20 years' service is £18000.

 

However I do know that many NHS clerical workers will not be able to afford a pension contribution of £900 pa and not many stay with the NHS for 20 years.

 

How many clerical workers with tewnty years experience are on £15k?

[bridge too far]

How many clerical workers with tewnty years experience are on £15k?

 

There won't be many with 20 years experience because they probably won't stay that long. However, many clerical workers (receptionists, medical records clerks to name but two) will be on band 2 or 3 on the following payscale. And remember, it's career average so any that started 20 years ago (as I did as a clerical officer) started on about £8K!

 

http://www.nhscareers.nhs.uk/details/Default.aspx?Id=766

[Sergei Gotsmanov]

There won't be many with 20 years experience because they probably won't stay that long. However, many clerical workers (receptionists, medical records clerks to name but two) will be on band 2 or 3 on the following payscale. And remember, it's career average so any that started 20 years ago (as I did as a clerical officer) started on about £8K!

 

http://www.nhscareers.nhs.uk/details/Default.aspx?Id=766

 

8K is not very much!

[bridge too far]

8K is not very much!

 

Certainly not now! And it wasn't in 1991 when I started out in the NHS either and I wasn't on the lowest clerical pay band!

 

Many clerical workers in the NHS today will start on about £13K for full-time work. That's another point, actually. A lot of clerical workers are women who work part-time hours so they won't even get £13K. And their pension will be based on average salary over their NHS working time. So if they work, say, 0.5 FTE and their eventual salary is based on 0.5 of, say, £18K (extrapolating salary increases over the past 20 years) over 20 years then their pension will be £2,250.

[View From The Top]

You have a very blinkered view of the world outside of your institutionalised teaching world. Its pretty tough out there.

 

Behave yourself. I work in the real world and run a business in the real world. You clearly have no idea of how FE works if you think we are just given money.

 

I'm also bright enough to examine the evidence and draw a conclusion myself.

 

Try it sometime.

[Sergei Gotsmanov]

Behave yourself. I work in the real world and run a business in the real world. You clearly have no idea of how FE works if you think we are just given money.

 

I'm also bright enough to examine the evidence and draw a conclusion myself.

 

Try it sometime.

 

Teaching is your bread and butter and you are probably lucky to be able to have the time to work full time and have another business. You are right I am probably stupid enough to run several business's which is a real struggle at the moment. As for paying into a pension; I wish at the moment!

[bridge too far]

Teaching is your bread and butter and you are probably lucky to be able to have the time to work full time and have another business. You are right I am probably stupid enough to run several business's which is a real struggle at the moment. As for paying into a pension; I wish at the moment!

 

I know it's different for self-employed people but bear with me on this one and take it as a generalisation.

 

At the moment, tax payers are complaining that they are having to pay for some elements of public sector pensions. Some of those pensions are so tiny that the government is required to top them up when people reach retirement age by providing pension credits. If a large number of public sector workers decide they can no longer afford to contribute to their pensions because the contribution rate is to rise, they will withdraw from the schemes and so the size of the pension credit scheme will rise inexorably. And you and me, the tax payer, will pay for those pension credits.

 

Now let's turn to the private sector. Many people working in the private sector can't afford to contribute to schemes provided by their employers, or to individual private plans. Sergei has just said he can't afford to at the moment. So what's going to happen when these people retire? Their state pensions won't be enough and they won't have a private pension to fall back on. So they'll receive an even greater state pension credit than those with miniscule public sector pensions. And who'll pay for those state pension credits for the private sector workers? You and me, the tax payer.

 

Obviously, folk who can afford to pay into an adequate private pension scheme will be OK as, probably, will public sector workers who can afford AVCs. And those at the top of the private sector - well they get annual pensions that you and I can only dream about as salaries, let alone pensions. In many cases, they don't even contribute to their pensions or, if they do, they get tax relief at the higher rate anyway. Their pensions are paid for from the profits of the companies concerned. Who pays for those companies' profits? You and me, the consumer.

 

So we all end up paying for each other, one way or another.