Give public sector workers a boost and save taxpayers money
IEA analysis featured in The Telegraph
IEA research quoted in The Financial Times
Neil Record writes in The Telegraph
IEA Chairman Neil Record has written in The Telegraph proposing a solution to spiralling public sector pension costs which would give public sector workers more pay flexibility whilst reducing the burden on taxpayers.
“Public sector pensioners have become the most economically privileged group in the UK. How can this be? The answer is they are beneficiaries of an unreformed pension system designed when economic conditions, and life expectancy, were very different. In 1950, life expectancy for a baby born in the UK was around 68; today it is closer to 82. For a pension that starts at 66, this significantly increases the cost.
“Despite this generosity, many public sector workers feel they are underpaid for difficult and challenging work, with the recent and current public sector strikes an obvious symptom of this malaise. No matter how generous, their pension entitlements are too distant to be useful today. This offers us an opportunity to close the gap between the reality of super-generous pensions, and what ordinary workers actually want.
“But what if the teacher would prefer to have a 33 per cent rise in their salary, and make their own pension arrangements?
“The Government could announce that from, say, 1 April 2024, every public sector worker would be given the option of doing just that – choosing to take the contributions in cash, and foregoing future years’ service in their pension scheme.
“Our typical teacher would have a one-quarter pay rise to £43,400, and would be able to decide how they would organise their own pension – just like the 27 million private sector workers who currently do exactly that.”
Read Neil’s full article here.