PCS: Pension increase would wipe out pay rise for low paid public servants

PCS: Pension increase would wipe out pay rise for low paid public servants

PCS: Pension increase would wipe out pay rise for low paid public servants

The government's claim it will protect lower paid public servants from cuts to pay and pensions is destroyed by figures that show the pensions increase would wipe out any salary rise.

Calculations by the Public and Commercial Services union, using the latest information available from ministers, show a civil servant who is paid £16,700 a year would have to pay £21 a month more in contributions under the government's pensions plans.

At just over £250 a year this would wipe out any pay rise they might get under a separate policy that means those earning £21,000 or less will receive a £250 increase while pay is frozen for two years for the rest of the public sector. This flat rate increase is also still well below the rate of inflation.

Using figures announced by the government last week, the union is relaunching its online pensions calculator, which allows members of the civil service pension schemes to work out what the changes mean for them.

The estimates take into account three key principles that the government has consistently refused to negotiate over: increasing employee contributions; linking retirement to the state pension age which will increase to 68; and changing the indexation of pensions from the RPI measure of inflation to CPI – which is traditionally lower because it does not including housing costs.

The government has said only those earning less than £15,000 will not have to make any increased monthly contributions. But this represents just 4% of the civil service and they will still have to work longer for less in retirement. Other examples include:

A 30-year-old who is paid £21,500 a year and has made eight years of pensions contributions would:

– Work eight years longer
– Pay £57 more a month
– Lose £21,700 over 20 years through the RPI to CPI change
– Lose £120,400 if they retire at 60 or £86,000 if they work longer

A 52-year-old who is paid £29,000 a year and has made 24 years of contributions would:

– Work five years longer
– Pay £77 more a month
– Lose £18,500 over 20 years through the RPI to CPI change
– Lose £18,000 if they retire at 60 or £14,500 if they work longer

PCS general secretary Mark Serwotka said: "Tory millionaires in the cabinet have faked concern for the lowest paid, but as with their now discredited 'affordability' claims, they have been rumbled.

"The truth is there is no protection against these cuts. And while ministers continue to insist on forcing public servants to pay more and work longer for less, we will continue to talk to other unions about stepping up industrial action in the autumn."

ENDS

Notes

– For information and interview requests contact PCS national press officer Richard Simcox on 020 7801 2747 or 07833 978216

– The Public and Commercial Services union represents civil and public servants in central government. It has around 300,000 members in over 200 departments and agencies, and in parts of government transferred to the private sector. PCS is the UK's sixth largest union and is affiliated to the TUC. The general secretary is Mark Serwotka and the president is Janice Godrich – on Twitter @janicegodrich

– Follow PCS on Twitter @pcs_union