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Minister to confirm public sector retirement age rise Planned public sector pension changes set out
(about 2 hours later)
The government is to say for the first time that it plans to link the public sector retirement age to the state pension age, which is to rise to 66. The government is detailing for the first time plans to link the public sector retirement age to the state pension age, which is rising to 66.
Chief Secretary to the Treasury Danny Alexander is also due to confirm public sector pensions will be based on workers' average salaries. It is also due to confirm plans to base public sector pensions on workers' average salaries, although any benefits already built up will be protected.
Mr Alexander is expected to criticise unions who are due to go on strike in protest at pensions changes. Chief Secretary to the Treasury Danny Alexander said the public sector could not be excluded from pension reforms.
Up to 750,000 public sector workers are set to walk out on 30 June. Up to 750,000 public sector workers are set to strike in protest on 30 June.
They are angry about changes to the way pensions are calculated and plans to seek higher employee contributions.They are angry about changes to the way pensions are calculated and plans to seek higher employee contributions.
The Chief Secretary to the Treasury will confirm in a speech that many of Lord Hutton's recommendations on public sector reform will be adopted. Mr Alexander will confirm in a speech later that many of Lord Hutton's recommendations on public sector reform will be adopted.
He is expected to say most public sector workers - bar the army, police and fire service - will see their retirement age linked to the state pension age. He is expected to say most public sector workers - bar the army, police and fire service - will see their retirement age - currently set at 60 - linked to the state pension age in the future.
But he will also say low paid public sector workers on less than £15,000 will not face any increase in pension contributions and those earning less than £18,000 will have their contributions capped at 1.5%.But he will also say low paid public sector workers on less than £15,000 will not face any increase in pension contributions and those earning less than £18,000 will have their contributions capped at 1.5%.
And he is expected to criticise unions who are due to go on strike in protest at pensions changes.
All pension benefits that were earned before any reforms are introduced - including retirement ages and final salary benefits - will be protected.
Mr Alexander will say: "There is an indisputable case for reforming public sector pensions to ensure that they are affordable and sustainable but still amongst the very best available.Mr Alexander will say: "There is an indisputable case for reforming public sector pensions to ensure that they are affordable and sustainable but still amongst the very best available.
"That case is simple. People are living much longer - the average 60 year old is living ten years longer now than they did in the 70s. This advance comes at a price. It is unjustifiable to ask the taxpayer to work longer and pay more so that public sector workers can retire earlier and receive more themselves.""That case is simple. People are living much longer - the average 60 year old is living ten years longer now than they did in the 70s. This advance comes at a price. It is unjustifiable to ask the taxpayer to work longer and pay more so that public sector workers can retire earlier and receive more themselves."
'Hell bent''Hell bent'
He will say the changes will put pensions on a "fair and affordable footing" but would ensure they remained "among the very best, if not the best available".He will say the changes will put pensions on a "fair and affordable footing" but would ensure they remained "among the very best, if not the best available".
And he will criticise unions "who seem hell bent on premature strike action before discussions are even complete" - accusing them of a "head-in-the-sand approach".And he will criticise unions "who seem hell bent on premature strike action before discussions are even complete" - accusing them of a "head-in-the-sand approach".
Teachers and lecturers are expected to join hundreds of thousands of civil servants in a walk-out on 30 June which the unions predict will see schools and jobcentres shut and queues at ports and airports. Teachers and lecturers are expected to join hundreds of thousands of civil servants in a walk-out on 30 June which the unions predict will see schools and job centres shut and queues at ports and airports.
PCS union general secretary Mark Serwotka said civil servants were being asked to work up to eight years longer and accept a three-fold rise in their contributions, while also seeing their eventual payments halved.PCS union general secretary Mark Serwotka said civil servants were being asked to work up to eight years longer and accept a three-fold rise in their contributions, while also seeing their eventual payments halved.
"It's absolute daylight robbery."It's absolute daylight robbery.
"I don't think it's surprising that people will want to defend themselves and if you're going to defend yourselves it obviously makes sense that you make common cause with council workers, health workers and teachers because we all face the same attacks.""I don't think it's surprising that people will want to defend themselves and if you're going to defend yourselves it obviously makes sense that you make common cause with council workers, health workers and teachers because we all face the same attacks."
Mr Alexander's speech comes after former Labour cabinet minister Lord Hutton produced his final report on public service pensions concluding that there was a "clear need for reform" in March.Mr Alexander's speech comes after former Labour cabinet minister Lord Hutton produced his final report on public service pensions concluding that there was a "clear need for reform" in March.
He rejected any suggestion that public sector pensions were "gold-plated", but said that in order to make them affordable for the future, millions of employees should work longer, receive less and have their pensions linked to career average earnings, rather than final salaries.He rejected any suggestion that public sector pensions were "gold-plated", but said that in order to make them affordable for the future, millions of employees should work longer, receive less and have their pensions linked to career average earnings, rather than final salaries.
The government accepted his proposals as a basis for consultation with public sector workers.The government accepted his proposals as a basis for consultation with public sector workers.
In the Budget, Chancellor George Osborne also changed the way public sector pensions are "uprated" against inflation - switching from using the Retail Price Index to the, usually lower, Consumer Prices Index to save £11bn a year by 2015-16.In the Budget, Chancellor George Osborne also changed the way public sector pensions are "uprated" against inflation - switching from using the Retail Price Index to the, usually lower, Consumer Prices Index to save £11bn a year by 2015-16.
Are you a public sector worker? How will you be affected? Send us your comments and experiences using the form below.Are you a public sector worker? How will you be affected? Send us your comments and experiences using the form below.