Retirement bonanza for public sector workers expected to see an increase worth double the current average wage increase
- Millions of retirees will get a 10.1 percent raise — paid for by the taxpayer
Millions of retired public sector workers will receive a pension increase worth double the average pay raise, new analysis shows.
The taxpayer will fund this week’s gilded 10.1 percent pension increase for five million retirees, who receive lifelong retirement income from the state.
Wages are expected to rise just five percent this year, despite double-digit inflation, according to the Office for Budget Responsibility.
The boost is the largest public sector pension increase in decades and the highest relative to wage growth in more than 30 years.
The analysis by the think tank of the Institute of Economic Affairs shows that the gap between public sector pensions and wage growth has not been this wide since 1992.
Millions of retired public sector workers will receive a pension increase twice the average wage increase, workers are expected to see wages rise just five percent this year despite double-digit inflation (photo: Striking public and commercial services unionists in March)
Tory MP Jacob Rees-Mogg said striking public sector workers should get pay rises in exchange for lower pensions on retirement
Increasing all public sector pensions in line with inflation is estimated to cost the Treasury an additional £4 billion.
This month, thousands of public sector workers will go on strike over wages, including junior doctors and teachers.
Tory MP Jacob Rees-Mogg said striking public sector workers should be given pay rises in return for a lower pension upon retirement.
He said: ‘The advantage that public sector workers get over those in the private sector is mostly in pensions. But they do not notice this advantage.
“It seems to me a way to deal with the current strike is to say, wouldn’t you rather have cash now and move to a defined contribution system that will be less generous and will not guarantee inflation and will be in line with what does the private sector get?’
Timothy Pike, of the Pensions Policy Institute think tank, said public sector workers misunderstand the value of their pensions.
He said, “Much more money goes into public sector pensions than a typical pension.”
