Public sector low earners avoid pension contribution hikes

Chief secretary to the Treasury Danny Alexander MP has proposed that the lowest-earning public sector workers should not have to pay higher pension contributions.

During his speech at the Institute for Public Policy, Alexander said that the government was not intending to increase contributions for employees earning less than £15,000 a year, and proposed a limit of 1.5 percentage point increase for those earning up to £18,000. Other employees face an average increase of 3.2 percentage points.

He said: “This would be progressive and fair. It would help to ensure that the increase in contributions will not cause people to opt out.

“It would be in keeping with the government’s strategy to protect the lowest earners, as we have done by raising the income tax threshold, and as we have done by taking tough decisions on a pay freeze, while accepting recommendations from the pay review bodies to provide a £250 pay rise for public service workers earning less than £21,000.”

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