Public Sector Executive October 2010

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Pensions don’t add up

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Many of them, particularly those working on low incomes in the private sector and struggling to fund their own pensions, will demand to know that the final outcomes of the Hutton review have treated them fairly and delivered them value for money.

The recommendations by Lord Hutton to increase employee contribution rates, the pension age and a move to career average will all help make public sector pensions more affordable for the taxpayers.

Average circulation for the period 1/8/09 – 31/12/09 is 7,041 per issue

It’s not just public sector pensions which don’t add up.

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In 1908, the Old Age Pensions Act provided a non-contributory pension of between 1s. (£4.42 at today’s prices) and 5s. (£22.12) a week to people over seventy who were on incomes that did not exceed 12s.(£53.08).

Decisions for tomorrow made today Sep/Oct 10

Very few would have been able to take advantage because they

They cannot be expected to make up the difference.

Life expectancy was 63 for men and 68 for women so on average women would have enjoyed eight years of pension whilst men would not.

Today, the single person’s pension is £97.65. the retirement age is unchanged but life expectancy at birth is now 78 for men and 82 for women.

The huge change in

demographics since pensions were introduced suggests that the cost of sustaining an adequate state pension for a generation that is living for 20 or even 30 years after retirement has become unsustainable.

So whether your pension is public sector, private or state, perhaps the best way to avoid 20 or 30 years of penury in your retirement is to smoke and drink heavily, avoid exercise and have an unhealthy diet.

That way, you’re unlikely to live long enough to have to worry about your pension.

very year there is a £10 billion gap between what state sector

employees and employers contribute and the value of the benefits that the government promises for these contributions.

Taxpayers contribute £3.39 to the four biggest pay as you go pension schemes for every £1 that public sector employees are contributing directly themselves.

would have been long dead because life expectancy at birth was 49 for men and 52 for women.

In 1946, the National Insurance Act introduced a contributory state pension for all of £1.6s a week (around £41.22 at today’s prices) for a single person and £2.2s (around £66.59) for a married couple paid from age 65 for men and 60 for women.

EDITOR’S COMMENT

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