The British government yesterday unveiled plans to raise the retirement age for most public sector workers by six years to 66 and make them pay more towards their pensions, provoking fury from trade unions.
Chief Secretary to the Treasury Danny Alexander, a senior minister in the Finance Ministry, warned state workers that it would be a “colossal mistake” to spurn the government’s pensions deal.
“Our offer is by far the best that is likely to be on the table for years to come,” he said in a speech in London.
Mr Alexander added that it was “unjustifiable to ask the taxpayer to work longer and pay more so that public sector workers can retire earlier and receive more themselves.”
The issue is one of the main factors behind a planned strike by teachers and civil servants on June 30 which is expected to start a wave of industrial action.
Yesterday’s proposals sparked fresh tension between the public sector and the government, threatening to derail sensitive negotiations on pensions between officials and unions.
“If that’s the government’s position–that they have decided what they want the answer to be - then it is going to make it impossible for us to stay in these negotiations,” said Brian Strutton of the GMB union, which represents workers across many sectors.
Gail Cartmail, assistant general secretary at the major Unite union, said Alexander’s intervention was “tantamount to bombing the talks.”
Many of the recommendations on pension reform in a government-commissioned report published in March would be adopted, said Mr Alexander.
He said that most public sector workers – with the exception of the army, police and fire service – will see their retirement age linked to the state pension age in the future, meaning most employees will have to work until 66.
Most public sector workers in Britain are currently allowed to retire at 60.
Public sector workers are also facing changes to their pension payments which will see many paying more in contributions – on average 3.2 per cent. Alexander insisted that low- and middle-earners would receive as generous pensions at retirement as they do now – albeit at a later age – and those on the lowest incomes would be spared higher contributions.