The recommendations of the government endorsed Hutton report can be summed up simply:
The majority already pay 6.5% of their wages each month into the NHS pension scheme. Hutton proposes a 50% increase - almost 10% of our wages. That is an extra £60-70 a month for those at the top of band 5 - until we retire. This adds up - over ten years this would mean a loss of wages of over £8000.
Up until April 2011 the value of pensions was increased each year in line with inflation measured by the Retail Price Index (RPI) which takes account of housing costs. Consumer Price Index (CPI) ignores housing and is typically almost a percentage point below the RPI. From now on the government says it will use the CPI measure. Year on year this will erode the real value of our pensions in retirement. An 80 year-old pensioner would be 12% poorer today if the CPI had been used for the last 20 years.
Work till we drop: Most members of the NHS Pension scheme have the right to retire at the age of 60. The government is planning to raise the retirement age to 68 – 8 more years of pension payments and 8 years less of payouts. It cuts the value of the scheme considerably. The loss of eight years of a modest pension of £5,000 a year would result in a loss of £40,000 - not including the extra contributions!
UNISON is campaigning to stop pensions changes that leave public sector workers poorer.
Are these big cuts justified?
- We can afford it! - The NHS pension scheme is currently in surplus – £7.8bn comes in each year and £5.6bn is paid out. The government gets the surplus. Any extra contributions will not go towards pensions but to pay off the banks’ debts.
- Cuts won’t save the NHS pensions scheme - an increase in contributions means fewer people will join the scheme making it less viable.
- Our pensions are not “Gold plated” - Historically the NHS pension, on average, delivers an extra £3,500 a year to women members at 60. Astonishingly, compared to private pensions for workers our pensions are good! Perhaps the law should be changed to require all employers, private and public, to make a fair contribution to staff pensions rather than destroying public sector pensions.
- We are not “living too long” – In the last 50 years we have all survived longer but the wealthiest live the longest - by up to 15 years! A low paid manual worker retiring at 68 can expect just over 5 years of pension. Working longer means a shorter life expectancy too! We can afford to allow working people to retire early enough to enjoy retirement. This is a political choice – if we can afford generous pensions for top bankers, company directors and MPs then what about the workers!
- We don’t have to cut public services, wages and pensions to pay off the deficit – the deficit was 5 times higher in 1948 when the NHS was formed and millions of council homes were built. We could afford it then and we can afford it now. This is about a political choice the government is making to make working people bail out greedy bankers.
- If we win over pensions we can also win over wage freezes, job losses, service cuts and outright privatisation.
What we can do?
- Write to our MPs
- Sign up for UNISON pensions briefings.
- Appoint a UNISON pensions contact for your work area
- Check out UNISON at www.unison.org.uk/pensions
- Check your contact details are up-to-date on 0845 355 0845
- Come to our lunchtime protests against cuts in the NHS pensions scheme and support our teaching and civil service colleagues in their strike on 30th June. Meet 12 noon East Oxford Health Centre, Manzil Way; 12 noon corner Ostler and London Road (for JRII staff); 12noon corssraods Gipsy Lane and Old Road (Churchill and warneford staff)
A leaflet about the pensions can be downloaded here