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What cuts will really mean

This article is over 12 years, 9 months old
How the attack on pensions will affect public sector workers
Issue 2263

The £1 billion cut to public sector pensions means that schemes will be slashed by:

  • NHS—£530 million
  • Teachers—£300 million

  • Civil service—£180 million

Some 1.5 million teachers, civil service workers and nurses will have to pay an average of £10 a month more for their pension. Many will have to pay far more.

The government’s own examples show the scale of the attacks on two civil service pension schemes.

Jane earns £25,000 a year. “Jane’s contributions currently cost her £25 per month after tax,” it says.

“Jane’s contributions will cost her £20 per month more.” That’s a total of £45.

Hayley, who is in a different scheme, earns £16,000 a year. “Hayley’s contributions currently cost her just over £37 per month after tax. Hayley’s contributions will cost her just under an additional £7 per month.” A total of £44.

In the NHS, a full-time nurse earning £25,700 will face paying an extra £20 a month.

And despite government claims, public sector pensions are far from gold-plated:

  • Over 90 percent are less than £17,000 a year.
  • The health service average is £7,500—and only £3,000 for women.

  • Those earning less than £15,000 a year won’t pay more, the government claims. But the attack comes on top of a pay freeze and soaring prices—a pay cut in real terms.

  • And a change to the way in which pensions increases are calculated—to the lower CPI rate of inflation—is taking money from all workers.

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