It’s war. Public sector unions have promised strikes and hinted at civil unrest if the government tries to cut their “gold plated” final salary pensions. But the £1 trillion unfunded pension liabilities of the public sector, as reported in yesterday’s Herald, are simply unsustainable. This is going to be an epic struggle. The unions are right on one thing though: the real scandal is the poor state of PRIVATE sector pensions.
The average public sector pension, according to the TUC is a modest £7,000, but look over the other side of the fence and you’ll find that the average private sector pension is much less - around £1,700 a year, according to the Pensions Policy Institute. And of course around a third of all employees aren’t saving anything at all for their old age. But to cap it all, most low income earners who do save into private pensions will lose out in the Pension Credit trap. It is a national scandal.
