The TUC’s Pensions Justice website does a good job of taking apart some of the spin that is being put forward by ministers and their spokespeople to try and ‘sell’ their attack on our pensions:

For example:

Myth 1. The low paid are protected

The government say they are protecting the low paid – they say that those earning less than £15,000 will not have to pay extra.

That is not true.

Most people in the public sector earning less than £15,000 work part-time. But the government only counts you as low paid if you would earn less than £15,000 if you did your job full-time.

So if you earn £12,500 a year for a half-time job, you are counted as earning £25,000 a year. More than four out of five of those who are earning less than £15,000 but working part-time and so don’t count as low paid are women.

Myth 2. ‘First, for most low and middle income workers, the new schemes should generate an income at retirement that is at least as good as the amount that they receive now.’ – Danny Alexander, the Chief Secretary to the Treasury

The trick here is the phrase ‘at retirement’.  In any pension scheme the longer you work or the older the age at which you start to claim your pension the bigger it will be. All pensions are paid on some estimate of how much longer you are likely to live. Therefore if you work longer any scheme can ‘generate an income at retirement … at least as good’ as any other scheme you choose.

You can’t therefore make a comparison between pension schemes unless you take into account years of service. So let’s translate this sentence into plain English:

‘If you want to start your retirement with the same pension as under the old scheme, you will have to pay higher contributions while you are working, work longer (and thus make extra years of contributions) and then when you retire even if you start with the same pension income it will reduce as CPI indexing knocks a little off its value every year.’

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