Socialist Worker

Pension facts

Issue No. 1935a

5%

Share of GDP the British government spends on pensions

11%

Average share of GDP other European Union governments spend on pensions


Final Salary Schemes

FINAL SALARY SCHEMES are based on a guaranteed percentage of your salary when you retire. In contrast a MONEY PURCHASE SCHEME is one where the employer puts money into a share-based pension scheme for you. This gives no guarantees on how much you will get and is dependent on the spin of the stock market roulette wheel. It is also much cheaper for the employer.

A CAREER AVERAGE scheme bases your pension on an average of your earnings over your entire working life for an employer, not your final salary. This may mean an improvement for a minority, but it will be worse for the majority whose earnings rise steadily during their working lives.


£79.60

The basic weekly state pension for a single person (£127.25 for a married couple)

£113.12

What the weekly basic state pension for a single person would be if the link with earnings had been retained since 1980 (£180.90 for a married couple)


2m

Number of pensioners in Britain living below the poverty line

22%

Percentage of earnings a 40 year old needs to save each month to get a reasonable pension from a private provider


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Article information

Features
Fri 21 Jan 2005, 00:00 GMT
Issue No. 1935a
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