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PBR: Public sector pay and pensions restricted

The Chancellor has unveiled changes to public sector pay and pensions which he says will save the taxpayer £1bn per year.

Speaking in his pre-Budget speech today Alistair Darling revealed that public sector workers earning more than £100,000 a year are to pay more into their
pension schemes.

Any appointment for positions paying more that £150,000 a year will need approval of the Treasury.

All public sector pay increases are to be capped at 1 per cent from 2011 for two years.

Darling said: “Public pensions need to be broadly in line with those offered in the private sector.

“So by 2012 contributions by the state to public service pensions for teachers, local government, NHS and the civil service will be capped – saving around £1bn a year.

“Public sector workers will make a greater contribution to the increasing value of pensions, with those earning over £100,000 paying more.”

On public sector pay Darling said: “Public sector pay makes up around half of departmental spending.

“The senior civil service will take the lead with a cut in its pay bill of up to £100m over three years.

“And any new Government appointment over £150,000 and all bonuses over £50,000 will require explicit approval by the Treasury.”

Darling added: “I can announce that, for the two years from 2011, we will seek to ensure that all public sector pay settlements be capped at 1 per cent.”

But Darling said the special circumstances of the armed forces would be recognised in these measures.

He added: “Mr Speaker, £12bn from greater efficiency, £5bn from scaling back or cutting lower priorities, and £4.5bn from reducing the cost of public sector pay and pensions.

“These are tough choices, but they are essential if we are to stick to our plan to halve the deficit and protect the frontline.”

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. How many of us I wonder have you looked around and noticed a new class of privilege has been born, early retired and early wealthy. All of this as result of taking the no risk, 9 to 5 option of a career in local government!!!
    Most UK public-sector workers have unfunded pensions – instead of lifetime contributions being invested in order to fund future benefits, the pensions are simply paid out of taxation as we go along.

    Time they joined the real world

  2. 21.5bn saved from public sector vs 0.5bn generated by taxing bankers! electionering ,

    still a bunch of clowns!

  3. When you dish billions in bonuses to city bankers, who got us into this mess, you have to find the money from somewhere. Nurses pensions?

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