The new coalition government has given a warning to public sector workers that in the future their pension could be less generous. David Cameron has stated that reforms of public sector pensions are necessary to help bring down the budget deficit and restore confidence back to the wider UK economy.
While previous pension entitlements would be maintained, he indicated that major reform was necessary in the near future, and suggested pensions plans in the private pensions as potential models. The government is urging trade unions and workers to be understanding and to compromise on certain points.
An independent body the Office for Budget Responsibility has recently stated that at the present rate in 5 years state pensions will cost the country 9 billion.
In the recent Budget the new Chancellor revealed plans to cut public spending by 100 billion within 5 years.
During the Budget which also proposed tough spending cute and tax increases, David Cameron also announced a two year pay freeze for many public sector workers. Union leaders have condemned the freeze and are instead referring to it as a pay cut, they have also voiced concerns that the proposed cuts could mean the loss of over 700,000 jobs.
Copyright Dayjob Ltd 28/06/10