Pensions

I appreciate it has proved difficult to get a grasp of the many issues in the debate over pensions.   Here are a few facts which are not always understood:

• Public sector pensions will remain among the very best available – a guaranteed level and inflation proofed.
• Most will see no reduction in the pension income they receive at retirement and many low and middle income earners will in fact receive a larger pension income at retirement.
• Low earners making under £15,000 a year (FTE) - that’s 15 per cent of the workforce - will not have to make increased contribution. Another million workers earning up to £21,000 will have their total increase limited to 1.5 per cent over three years.
• The pension people have built up so far will be protected: a guaranteed benefit in retirement free from market fluctuations or fees - something all but eliminated elsewhere.
• No-one within ten years of retirement will see any change in the age they retire or in the amount of pension they will receive on retirement.
• Only one in three workers in the private sector have an employer contribution at all, while nearly nine in ten in the public sector do.
• Only 2.1 million people in the private sector, around 10% of private sector workers, are active members of a defined benefit pension scheme, with guaranteed benefits in retirement.
• Added 30.11.11:  It should be noted that a very significant factor in the increasing cost of pensions is good news: on average we are living longer and benefit from pension payments for longer.