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Welfare Reform on the Web (July 2009): Pensions - UK

Cost of public sector pensions 'is now 1.2 trillion'

M. Costello

The Times, June 29th 2009, p. 8

The true cost of pensions for all current public sector workers has been estimated at 1.2 trillion - equivalent to 85 per cent of Britain's GDP and worth 20,000 for every man, woman and child in Britain. According to the British-North American Committee, made up of academics and business leaders, the Treasury is greatly understating the cost of providing gold-plated retirement schemes for public sector workers. The committee calculates that public sector pension costs, as a percentage of economic output, are three times higher than in Canada or the U.S.

(See also The Guardian, June 29th 2009, p. 20)

MPs to call for end to retirement at 65

R. Prince

Daily Telegraph, June 29th 2009, p. 2

Reports that the Work and Pensions Select Committee is to recommend the abolition of compulsory retirement at the age of 65. It will argue that allowing older workers to continue with their paid employment would enable them to rebuild pension pots which have fallen in value by as much as 20% in the recession.

Pension warnings go unheeded as half fail to save enough

J. Insley

The Guardian, June 30th 2009, p. 22

According to the Scottish Widows UK Pensions report, worries about the recession are causing people to ignore warnings about the pensions gap, with the number of people saving enough for an adequate income in retirement remaining static in the past year. While the percentage of those saving adequate amounts has increased in the past year from 51% to 54%, the report found the gender gap has increased, with only 47% of women saving enough, compared with 59% of men.

Pensions crisis to hit millions of workers

E. Conway and M. Butterworth

Daily Telegraph, June 24th 2009, p. 1 + 2

A series of authoritative reports have shown that Britain faces a growing pensions crisis. Ninety-six per cent of private firms have concluded that generous defined benefit occupational schemes are unsustainable, although these continue in the public sector, creating a form of pension apartheid. At the same time the value of savings in private pension schemes has plummeted due to falling share prices and property values, and the state pension is the least generous in the Western world.

Workers face 20 per cent cut in pensions

P. Davies

Financial Times, June 22nd 2009, p. 4

According to industry experts, British workers with defined contribution pension schemes could see the value of their pensions fall up to twenty per cent if the proposed EU Solvency II rules, which govern insurance company capital requirements, are introduced in 2012.

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