Public sector workers will have to work longer and pay more into their pension funds if they want to continue to receive better pensions than those in the private sector, the chief secretary to the Treasury, Danny Alexander has said.
Around 6 million workers will be affected by the changes that will see the pension age for public servants rise to the match the state pension age of 66.
Final salary schemes will be scrapped and replaced with benefits based on career averages. Pension contributions will rise, taking more pay out of civil servants salary.
Alexander said: “People in this country are living longer- we’re seeing longevity increase by 10 years since the 1970’s, and that’s predicted to go further in the future.”
“That’s why we’re increasing the state pension age. It will go up to 66 from 2020, and that’s why we’re recommending there is an increase in pension contributions.”
Workers earning less than £15,000 will not have to increase their pension contributions, whilst higher earning staff such as doctors and teachers may see a doubling of their contributions from next April.
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