The government has got it wrong on pensions | Letters | Money

The chancellor of the exchequer recently pointed out that public sector pay was superior to private sector pay because of the occupational pension accruing to long-time public sector workers (Chancellor urges restraint on public sector pay, 17 July). However, when it comes to overall pension payments (occupational plus state pensions) most seasoned public sector workers coming up to retirement will note that their state pension is considerably less than that of private sector workers because public sector workers were opted out of the state earnings-related pension and graduated pension schemes. So was he being wicked or stupid when he made the pronouncement? Needless to say, most contemporary public pension schemes have been reduced to rubble over the last few years, giving them little or no advantage over private sector schemes. And the chances of pension-accruing long-term employment in the public sector are hugely reduced due to changes in contractual status and patterns of working.

I don’t know whether ministerial pensions for ex-ministers who are already extremely wealthy have been reduced, but I somehow doubt it.
Nicholas Whitmore
Newcastle upon Tyne

As a teacher and later as a lecturer, I was always employed in the public sector. My late husband worked for a private firm. We had jobs of similar complexity, and both managed similar sized teams. My educational qualifications were slightly higher than his, and I worked many more hours. His salary was approximately 25-30% higher than mine. He had a company car. I didn’t. At the end of each year, provided he had done the job he was employed to do, he was awarded a bonus, typically of several thousand pounds. I wasn’t.

After his death, I was awarded two-thirds of the pension he would have received. It is still 20% higher than my own pension after over 35 years in education. This government’s actions say more about their views on what sort of work is of value than they do about economic necessities.
Jill Wallis
Aston Clinton, Buckinghamshire

The chancellor says: “When you take into account the very generous contributions that public sector employers pay in for their workers’ very generous pensions… .” I worked for the best part of 40 years in the public sector. My pension is around £9,000 per annum. I won’t be buying land next to my house any time soon. How dare he.
Christine James
Grange-over-Sands, Cumbria

As far as the 10% pension premium linked to public sector pay (which Philip Hammond refers to as the clinching evidence of public sector privilege) is concerned, the butt of the criticism should be the private sector itself – for allowing the bosses to cream off profits at the expense of the future wellbeing of their workforce and readily changing, reducing or cancelling the terms and conditions of private sector pensions (as with the end of final salary schemes), usually, in recent years, with governmental support or at least tacit approval.
Gillian Dalley

Gaby Hinsliff rightly calls the government decision to raise the state pension age to 68 “frankly scary” (Even if you love your job, this new pension age is scary, 21 July). The future often is. But the government is at least giving the public notice of its planned changes in time enough for individuals to plan their retirement.

After government’s scandalous failure to respond to the case of the Waspi women (baby boomers caught without the pension they had expected to get at 60), this notice is timely. And necessary. I am currently making a TV programme for Panorama which considers the lives of people who are 100 or over. There are currently 15,000 of them and the number is set to rise (even if the rate of increase is slowing). Some of them have been drawing their state pensions for 40 years. This situation is not economically sustainable.

We all need to reconfigure what we expect of our lives and to look at our last 20 or 30 years as a time of opportunity. Many older people want to work and employers will increasingly need part-time, retrained workers. The entire country – both government and governed – needs to embark on a major rethink of how we are to grow old.
Joan Bakewell
Labour, House of Lords

Gaby Hinsliff needs to have some more time away from work, if she thinks that early retirement is a horror. As someone recently retired, I can confirm that it’s a brilliant opportunity to refresh your identity by engaging in all those things you had no time to do when working and by spending lots of quality time with your partner, family and friends. There is a downside, though: I now have the space to regret all that time wasted in employment – it’s such a disappointment how little of the full range of human skills and capability is used by organisations.
Paul Griseri
La Genetouze, France

Your report (Top 1% of households in UK fully recovered from financial crisis, 15 July) exposes a shocking level of inequality across society, but is at risk of unhelpfully pitting younger against older generations in a debate that’s far more complex. Inequality exists within as well as between generations. According to Age UK, there are still 1.6 million pensioners living in poverty, and a further 1.2 million pensioners with incomes just above the poverty line.

Our own research with the Resolution Foundation suggests that inequality will be felt equally as sharply, if not more so, by the next generation. We found that 1.8m lower-middle income households headed by people aged between 50 and the state pension age are struggling after the post-financial-crisis pay squeeze, with many earning less than the typical annual salary of £21,000 (and half of women from this group earning less than £12,600). Half of these households had less than a month’s worth of income in savings. This is at a time in their lives when they should be preparing for retirement, often have the added pressure of health problems or caring responsibilities, and are increasingly bearing the costs of living alone. The standard state pension alone is not likely to fund a good quality of later life. There is absolutely a need to challenge inequality in our society, but it’s imperative that the debate is balanced.
Dr Anna Dixon
Chief executive, Centre for Ageing Better

The chancellor’s statement that public sector workers are overpaid because their pensions are superior to those in the private sector is nonsense. Pensions only generate income when they are realised, usually at the end of employment. Until then they cannot contribute to the family budget in order to pay for food, housing, transport and all the other expenses. If private sector pensions are inferior, there is a simple reason for this. Margaret Thatcher’s government allowed private employers to take a pensions “holiday” and cease paying their contractual contributions. Employees were not treated similarly. Consequently, the funds became depleted and employers, having pocketed the money that they would have paid into the fund, abandoned their obligation to pay decent final-salary pensions. They replaced these with low-cost, poor-payout arrangements subject to the fluctuations of share values.
Tim Webb

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