Increase in public sector pension payments revealed

Teacher with children

Highly-paid public sector workers will have to pay thousands of pounds a year in extra contributions to keep their pensions from next April, it is understood.

The pension changes affects NHS workers, teachers and civil servants.

In the March Budget, Chancellor George Osborne announced that members of unfunded public sector pension schemes would have to contribute an extra 3% on average.

The proposals will affect 2.5 million workers, with the highest earners hardest hit when they are introduced next April.

Those earning between £15,000 and £21,000 will pay 0.6% more into their pensions from next April, and the government wants those earning more than £21,000 to pay up to 2.4% more, working out at an extra £108 a year. Those earning under £15,000 a year will not be affected.

Specifically, doctors earning £100,000 a year will pay almost £2,000 extra, teachers on the same amount face hikes of £1,752 and civil servants an extra £2,100. For those earning around £50,000, NHS workers will pay an extra £768, teachers £696 and civil servants £516.

Civil servants earning more than £100,000 will face the biggest hikes in their pension contributions, it is understood. They will have to pay in an additional £3,400 a year.

The increases will eventually even out at an average of 3.2% of each public sector worker's gross salary by 2015, figures show.

Over the next three years, the Treasury hopes to save a further £2.8 billion in public sector pension contributions.

Andy Heryet, independent financial adviser at Platinum Wealth Management, comments: "This just goes to reinforce the government's focus on the 'pension shortfall', and the emphasis that individuals need to take some responsibility.

"This focus has also been extended into the private sector with the introduction of NEST (National Employment Savings Trust) where both employers and individuals are expected to contribute towards their retirement."

Heryet says he can understand why the increases haven't been received well, but the defined benefit public sector schemes are generally "good schemes".


Your Comments

ive read that according to unison , the government has withdrawn arround 5 billion from public sector pensions already to bail out the financial deficit.
hardly seems fair is this true