Socialist Worker

Exposing the government’s lies about public sector pensions

The Tories claim that public sector pensions are unaffordable—but this is another excuse to make workers pay, says Anindya Bhattacharyya

Issue No. 2280

There are hundreds of reasons why workers are walking out together against the Tories on 30 November. But the key issue that has united the unions is the government attack on public sector pensions.

Pensions are deferred wages. So by cutting the pensions of public sector workers, the government is effectively cutting their wages. Workers will have to pay more into their schemes and work for longer. And they will get less out at the end of the day.

The Unison union has calculated how the proposed changes would affect Tina, a nurse who has worked for the NHS for 27 years. She would pay £597 extra each year into her pension, but receive £1,275 a year less when she finally retires.

It’s a similar picture for civil service workers, according to the PCS union. It calculates that the average PCS member will pay in an £756 extra each year and retire eight years later. Yet they will lose between 15 and 20 percent of their pension value in retirement.

Why is the government doing this? We are told that it is because the current arrangements are unaffordable. Deputy prime minister Nick Clegg talks of “gold-plated public sector pension pots” and says we have to “face up to living within our means”.


Yet the government’s own figures undermine this line. The Treasury’s Hutton report found that the sums paid out for public sector pensions are set to steadily fall as a percentage of GDP over the next five decades.

Other studies have shown how public sector workers put far more into their pension schemes than they take out. The NUT union examined the Teachers’ Pension Scheme from its foundation in 1923 to today. It found that in current prices some £46 billion more had been paid in than taken out.

Public sector pensioners are also accused of living a life of luxury. But the PCS calculates that its average member gets a pension of just £4,200 a year. When combined with the basic state pension, that works out as £182 a week—just £4 a week over the government’s official poverty level.

Compare that to Clegg’s own situation. His pension pot stands at around £440,000 and will pay out a tidy £28,400 a year, according to figures calculated by the Unite union.

So if public sector pensions aren’t “gold-plated” and aren’t “unaffordable”, why is the government so intent on slashing them? The truth is that the attacks on pensions are a central part of its wider cuts agenda.

Chancellor George Osborne announced in his spending review last year that the government would “seek changes that deliver an additional £1.8 billion of savings per year in the cost of public service pensions”.

In other words, the money saved by the government’s proposals won’t be used to boost the pensions of low paid workers, or to shore up otherwise unaffordable pension schemes. It will go straight to the Treasury to pay off the deficit.

So the pensions attacks are central to the government’s wider assault on ordinary people. It wants workers to pay for the global crisis of capitalism.

And by striking together in unprecedented numbers, workers are telling the government that this time they aren’t going to foot their bill.

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