Civil servants facing £3000 pension hike

UK Political Correspondent

Friday 29 July 2011

THE Tory-LibDem Coalition has been accused of placing pension negotiations in "jeopardy" after thousands of civil servants across Scotland were told they would have to pay up to an extra £3000 a year.

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Kate Devlin UK Political Correspondent

More than 50,000 civil servants across Scotland face having to pay more to receive the same pension.

But Scottish teachers and NHS staff will not be affected – unlike their counterparts in England and Wales, because of devolution.

Unions reacted angrily to the announcement, accusing Danny Alexander, the LibDem Chief Secretary to the Treasury and most senior Scot in the Cabinet, of pre-judging ongoing negotiations.The move comes just weeks after more than 750,000 public servants, including 30,000 in Scotland, went on strike against pension changes. There were warnings yesterday that more workers could follow them out the door in the wake of the latest announcement. Ministers said the move was necessary to ensure the sustainability of public sector pensions in the face of an increasingly aging population. Business organisations also backed the move, saying that it was only fair that hard-pressed taxpayers picked up less of the bill. But unions insisted the pension schemes were sustainable in the long-term and accused the Coalition of using reform as a cover for an extra tax.Mr Alexander insisted that under the plans higher earners would pay more while the low paid would be protected. Those who earn less than £15,000 will not pay any more per month, while the maximum increase will be a rise of 2.4%. But this could leave some civil servants paying more than £3000 a year extra before tax. Those on £21,000 a year would pay £9 extra a month, rising to £24 extra a month on £27,000 and £43 extra a month on £35,000. High earners on £100,000 will pay £175 extra a month, while those on more than that will pay an average of £284 a month. The Treasury emphasised that once tax was taken into account, workers would lose less of their take home pay. The latest figures show there are around 55,100 civil servants in Scotland. Public sector union Unison said that talks aimed at averting strikes over pensions were now in jeopardy.Dave Prentis, the union’s general secretary, accused ministers of “naive tactics” and a lack of negotiating skills.Dr Hamish Meldrum, from the British Medical Association, said the increase was “just a blatant tax on pensions”. The money was not going into a pension schemes, he added, it was going to the Treasury. “This is just to raise money out of public sector workers to try to plug the hole in the Government’s overall spending deficit,” he said.Unions also warned the changes could drive people away from the schemes, potentially triggering collapse.Across the UK the changes will affect 2.5 million public service workers.Mr Alexander said the announcement marked the latest step in putting public service pensions on a “sustainable path”. He added that because the country was in difficult times, “those with the broadest shoulders will bear the greatest burden”. The changes received the backing of the Chartered Institute of Personnel and Development. Charles Cotton, of the organisation, said they were “part of a necessary compromise to retain a great employee benefit at a fairer cost to hard-pressed taxpayers”. The Treasury said the changes would raise more than £1bn next year. The Government intends to consult on the plans until the end of September.

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Civil servants facing £3000 pension hike

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