An unfair tax on civil servants

Pensions increase an unfair tax on civil servants

Prospect has condemned the government's decision to impose a pensions contribution increase ranging from 1.2% to 2.4% for civil servants in the year from April 2012.

The announcement was made on 16 December following a sham consultation exercise that closed in October.

Prospect deputy general secretary Dai Hudd said: "Today is the day the reality of the government's policies bites. We now know what the impact on our members in 2012 will be. What offends them most is that none of these increased contributions will go into the pension schemes or contribute to reducing schemes' liabilities. This is a blatant tax on civil servants.

"Don't forget, too, that this is just the first tranche – members will face increases in 2013 and 2014 as well, all of it also going straight into the Treasury's coffers."

Hudd added that today's announcement brings into focus the consequences of the 1% pay cap announced in the autumn statement.

"The pay freeze over the last two years has already meant a cut in living standards of over 10%. The pensions contribution changes cancel in a single stroke the paltry pay increase allowed for civil servants over the next two years," he said.

"In fact projected inflation over the next two years, allied to imposed pensions contribution increases, will leave people more than 17% worse off over the four years – and nearly 20 per cent poorer by the end of year five.

"Our members are reasoned specialists and professionals, who take a pragmatic approach to events. The fact that they gave such strong support for the November 30 strike is evidence of how upset they are about the way they are being treated."

The details are on the cvil service pensions website.