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Hutton recruited to review public sector pensions

21 June 2010

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Public sector workers may have to contribute more to their pension pot as part of the government’s efforts to make savings.

Former Labour cabinet minister John Hutton has been brought in to lead an inquiry into making cuts in public sector pensions, Chancellor George Osborne announced.

The former work and pensions secretary will take charge of the Independent Pensions Commission, which will draw up a plan to make immediate savings by September, with a full-scale report due in time for next year’s Budget.

The news follows figures from the new Office of Budget Responsibility, which found the bill for taxpayer funded retirement packages could hit £9bn a year by 2015.

Cabinet ministers have described the increases as “unsustainable”, but the plans have been criticised by trade unions, which insist the schemes are “affordable and sustainable”.

And Labour accused ministers of using “misleading” statistics to justify the move.

Mr Hutton was reported to be considering reducing the burden on the public purse by increasing the contributions of workers –  which are in some cases significantly lower than in the private sector.

A 2.5% across the board rise was said to be enough to save £3.2bn a year.

Copyright © Press Association 2010

Department for Work and Pensions

Your comments (terms and conditions apply):

“I, as I suspect most other health service workers do, earn my pension and pay for it. At the recent choices road show we were explicitly told that the NHS pension was self funding. If I lose out I will be very aggrieved with less than seven years to go till I retire – sad that of late I have started to count down to my  retirement kind of says it all about how health service is going” – Name and address withheld

“Public sector pay is considerably lower than the private sector, thus the pension will also be lower. It’s the final salary bit that most people don’t like (those that aren’t in such a scheme) but this is why some people choose the lower-paid public sector for the security of the pension scheme. Let’s be fair, if you’ve worked all your life to help the rest of the population, ie, doctors, nurses, firemen ambulance drivers etc, you deserve a good pension” – Carol Wotherspoon, High Wycombe

“Absolutely not. The bankers’ pensions should be cut. The private sector created the mess, they should now have to refund the taxpayer. A large proportion of which should come from their own pension pots, their incrediably overflated salaries and all bonuses forwarded to the treasury. I work in Pensions in the NHS after 30 years of working I will receive a pension of approx. £8,000 a year. Hardly mindblowing figures. And even the high earners such as the consultants deserve their pension as their job is truly worthy, saving people’s lives. The bankers should pay, not us” – Janet O’Brien, Kent