Millions in UK Public Sector to Work Longer for Less

The British government will confirm proposals to raise the retirement age of up to six million public sector workers by six years on Friday from 60 to 66.

A mass march in protest at government cuts sets off from Embankment on March 26, 2011 in London, England.
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A mass march in protest at government cuts sets off from Embankment on March 26, 2011 in London, England.

The proposals will bring public sector workers in line with the rest of British society for the first time. The government has already said the age of retirement will increase to 66 by 2015. Only police officers, members of the army and fire service will still be able to retire at 60.

The coalition government also wants to replace current public sector “gold plated” final salary pensions with pensions that are based on a career average salary instead in an effort to reduce its 30 billion pounds ($48.36 billion) pension bill.

The Office for Budgetary Responsibility estimates the cost of public sector pensions to the Treasury will increase to 32 billion pounds by 2015 if reforms are not made.

"There is an indisputable case for reforming public sector pensions to ensure that they are affordable and sustainable but still among the very best available," Danny Alexander, chief secretary of the Treasury will say in a speech later today.

"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," Alexander will add.

He will also say low paid public sector workers on less than £15,000 a year will not face an increase in their pension contributions and those earning less than £18,000 will have their contributions capped at 1.5 percent.

The announcement comes at the end of a week when three of the largest public sector unions voted to strike over government proposals to reform public sector pensions.

Up to 750,000 public sector workers including teachers and lecturers will stage the largest walk out in nearly a decade on June 30 over the proposed reforms.'

Daylight Robbery'

However, Mark Serwotka, the leader of the civil servant’s union the Public and Commercial Services union, said civil servants were being asked to work up to eight years longer and accept three fold increase in their pension contributions, while also seeing their eventual payments halved.

"It's absolute daylight robbery,” he said. "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."

Alexander told the BBC’s Radio 4 Today programme on Friday morning that he was not saying publicly anything he hadn’t said privately, adding negotiations between the government and the unions had been “extremely positive”.

But Unions have objected to the tone of his speech which suggests: “those who oppose this change think that they can force the government to change its mind” adding union leaders seem “hell-bent on premature strike action before discussions are even complete”.

"This head in the sand approach is a colossal mistake. This government will reform public service pensions, and this is the time to shape that change not try to block it," Alexander will say.

Earlier on Friday morning, Brian Strutton, the leader of the largest public sector workers union the GMB said Alexander’s speech threatened the negotiations and warned that if the government had already made its mind up over pension reform the union would have no choice but to walk away from those negotiations.

“If they’ve made their minds up that is a show stopper,” Strutton said.