16.03.16
Public sector employer pension contributions to rise by over £2bn by 2021
Public sector pensions can only be sustainable if employer contributions rise by over £2bn by 2021, the chancellor announced in today’s Budget.
George Osborne said that the decision had been made following a regular evaluation of the pension discount rate.
The rise will not come into effect until 2019, when it will increase by £1.97bn in 2019-20 and £2bn in 2020-21.
He said: “This will not affect anyone’s pension, and will be affordable within spending plans that are benefitting from the fiscal windfall of lower inflation.”
Osborne also said that public sector pension reforms in the last Parliament will save over £400bn in the long term.
He also announced anti-tax avoidance measures including imposing a new duty on public sector employers to ensure that their employees pay the correct tax.
The government recently completed a consultation on plans to revoke and replace the Local Government Pension Scheme, prompting the Pensions and Lifetime Savings Association to express concern about excess public sector deregulation.
(Image c. PA Wire)