I’m indebted to the media coverage to learn that as a public sector worker, I’m entitled to retire at the age of 60. I’d laboured (both literally and metaphorically since 1997) under the impression that I’d be hard at it until I was 65 like everyone else. But here is what they don’t tell you:
- Public sector pensions aren’t a ‘free’ perk. Six per cent of what we earn goes into the pension pot, with a three per cent contribution from your employer. Think about it. A nurse on say £20k a year is stumping up £100 a month for a maximum pension of £10k a year, assuming he/she works for 40 years.
- Retiring at 60 costs. Assuming you haven’t got your 40 years in and you want to retire at 60 then you lose an eighth of your pension. So in the example above, that nurses ‘handout’ becomes Â£8,750 a year.
- If you have got your 40 years in, not everyone can afford to retire at 60. Mortgages still to be paid, kids to support through university etc, so they carry on to 65 (or 67 if you like) still paying their six per cent and get no greater pension than if they had retired early.
Don’t get me wrong, public sector pensions are a good deal and part of the deal struck when people joined whatever service they’re in. But a deal it was and not one to arbitrarily renege upon when they are 50 plus with too little time to make alternative arrangements.
Back to the nurse who has stuck £48 grand into the pot, no allowance for inflation etc, over 40 years, all for less than a maximum two hundred quid a week and a means-tested reduced state pension. Cool, eh?
What really pisses me off are the those that we should suffer the same pensions crisis. Back in the eighties and early nineties, a Tory government begged us to switch to the private sector. There were promises of untold wealth in old age by switching our contributions into a burgeoning stock market.
Most folk, like me, said “No, thankee,” but the private sector they were quids in. Final salary pensions, 60 , not 50 per cent that has since gone tits up because the private sector saw the opportunity to take a pension holiday as the money rolled in. And out again.
Us public servants stayed put and will be okay, hopefully, God and Gordon willing.
The rest of you, sorry taken in by the Tories. Again.