Pensions Put Out To Pasture

The Great News! The recession is nearly over and it's only needed public borrowing and printing enough money to account for 21% of GDP.

The Bad News. We're broke and you've got to pay it back.

The Result. Pensions are even less affordable than ever and yours is going to be cut.

In a story in today's Times plans are announced to cut council workers pensions. One of the plans is to swap to career related average earnings (as tried a couple of years ago for the NHS). It seems likely that all further pensions accruals (not just new starters) will only continue to build benefits on this basis. For council workers at the upper end of the salary range (a bit like consultants) this will mean cuts in pensions of 10's of thousands per year.

A senior local government official who has been briefed on some of the proposals said that doctors, nurses and teachers were likely to face similar changes as the public sector burden becomes unaffordable.

Wave goodbye to that last minute Bronze award impacting your pension. On a career average basis it'll make not a jot of difference. The pension changes are likely to be brought in with the sweetener of a pay increase. This will of course be eroded over the course of a couple of years DDRB pay awards.

Gird up your loins for a battle!