Social Divide In UK Pensions

By Malgwyn | November 2, 2008

Public sector pensions will cost £1 trillion
“Ministers are accused of recklessness as state workers’ schemes are revealed to be 15 times bigger than those of private workers.” Read the article in The Sunday Times by Robert Watts

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One Comment

  1. Don
    Posted 23 November 2008 at 16:56 | Permalink

    There are lies, dammed lies, and statistics.
    This truism is excellently illustrated by the Times article.
    To compare the average public sector worker pay with the average private-sector pay is more than a little disingenuous unless the average public sector worker is carrying out a similarly skilled task to that of the average private-sector worker.
    To compare the pension of an average public sector worker to that of an average private-sector worker is more than a little misleading since the average public sector worker spends far more time in a pensionable job than that of the average per private-sector worker and hence is bound to be entitled to a significantly greater pension.
    So the average public sector worker will be entitled to a pension worth £17,091. When will they be entitled to it? Since public sector work and pensions depend on the final pay the data needs to be qualified as to whether pay relates to next year or in 40 years time when £17,091 will seem a very small pension.
    To state that public sector pay has been rising at a higher rate than the private-sector pay for some years is also misleading. I can assure you, that pay the most civil service workers during the last two years has been lower than that shown on the following government website http://www.statistics.gov.uk/cci/nugget.asp?id=285 . I presume that the statistics quoted in a newspaper article include the annual incremental increases in pay that applies to public servants new to their job to bring their pay from a level significantly below the market rate to a level not too far below the applicable market rate.
    Significantly, the author of the article accidentally forgot to mention that when the comparative case studies are carried out to determine civil service pay rises, the pay is deliberately pitched below the market rate to take into account contributions that would normally have been paid to qualify for a final pay pension .

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