Socialist Worker

Double standards over pensions reveal the class divide

Issue No. 2141

If the Royal Bank of Scotland had been allowed to go bust the bank’s former boss, Sir Fred Goodwin, would be on a pension of £20,000 a year. That’s what he’d be entitled to from the Pension Protection Fund, the safety net this government was forced to put in place for when company pension schemes collapse.

That’s still a far better pension than the majority of us will ever see. Instead “Fred the Shred” is trousering £693,000 a year of our money. Senior directors of Britain’s top 100 companies currently retire with an average yearly pension of £333,400.

Adam Crozier, Royal Mail’s chief executive, is Britain’s highest paid public sector boss. He pulls in £1.25 million a year and is in line for a six-figure annual pension from the position he has held since 2003. In contrast the average post worker earning £18,000 would receive a pension of just £7,800 after 30 years’ service.

Meanwhile the Tories and their press pack are howling that public sector pension schemes must be cut or scrapped. The government has asked the European Union for advice on its legal position if it were to cut public sector pensions.

Rather than throwing our cash at failed bankers, this government could use it to increase the state pension. At £4,716 a year – payable only if your national insurance contributions are up to date – it is among the lowest of any major economy.

But at least the state pension is relatively safe – this week saw millions of private pensions plummet in value as stock prices collapsed.

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What We Think
Tue 3 Mar 2009, 18:33 GMT
Issue No. 2141
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