Public sector pensions 'should be raised, not cut'

Public sector pensions 'should be raised, not cut'

By more than five to one, the British public says the average public sector pension should be increased to at least £10,000, a YouGov poll for Prospect has revealed.

Only 11% of people say public servants should get less than £10,000.

The increase was supported by 63% of those polled and contrasts with the average public sector pension now in payment of £6,500 (Independent Public Service Pensions Commission).

The poll, carried out between 9-10 February, comes on the eve of the Hutton Commission’s final report, due out tomorrow 10 March.

The findings refute the myth put about by government ministers that public sector pensions are ‘gold-plated’ and resented by the British public.

But they also show that most people hugely over-estimate the true size of public sector pensions because of years of exaggeration by politicians, lobbyists and sections of the media, says Prospect.

The poll of 2,500 adults found that (see PDF attached for statistical breakdown):

  • when asked what the average public sector pension should be, the average across all responses was £17,088. Forty-four per cent said it should be more than £15,000
  • almost half (49%) of respondents believe the average public sector pension is more than £10,000, only 23% believe it is less than £10,000. In fact about half of public sector pensioners receive less than £5,600. The average is £6,500
  • exactly half (50%) believe the government’s plan to make public sector workers pay an extra 3% for their pensions is unfair. Only 37% say it is fair
  • just under half (46%) believe the public sector pensions bill is unsustainable. But when informed what proportion of national income is taken up by public sector pensions, only 17% say that further reform is necessary
  • on average, respondents said that people need 54% of their salary on retirement
  • 47% believe public sector workers work hard and deserve a good pension, while 21% disagree.

Prospect Deputy General Secretary Dai Hudd said: “People have little understanding of what public sector workers get to live on in retirement. But they still believe these workers deserve a great deal more.

“These findings show how out of touch the government is with public opinion. The coalition has swallowed the myth that public sector pensions are too high, peddled by bodies like the Institute of Directors, Institute of Economic Affairs, the CBI and certain Conservative and Liberal Democrat politicians. But employers themselves are far more realistic.

“This poll clearly shows that pressure to increase contributions does not come from the public, who have shown themselves to be more fair-minded than our politicians.”

The YouGov findings follow the warning by Baroness Eaton, chair of the Local Government Association, that if public sector workers are made to pay higher pension contributions they will opt out of schemes, so reducing scheme income.

In January, Prospect’s evidence to Lord Hutton’s review said that opt-outs posed a genuine danger to the future affordability of schemes.

Official projections from the Government Actuary’s Department show that under existing arrangements the net cost of public sector schemes will drop from 1.5% of national income in 2009-10 to 1.1% of national income by 2050.

Those polled were asked if they thought this decrease goes too far: 27% said that it does and 25% said that would be the right level. Only 17% said the decline does not go far enough.

Dai Hudd said: “The predicted fall in pension costs is thanks to reforms already negotiated with the unions in 2007. These reforms introduced career-average schemes for new entrants and risk-sharing mechanisms to cap the cost of the schemes to taxpayers.

“The clear message to government from the public is: leave public sector pensions alone.”