Treasury chief secretary to outline public sector pension reforms

Chief secretary to the Treasury Danny Alexander MP will set out the government’s latest thinking on public sector pension reform today. He is expected to announce that the lowest paid public sector workers will not have to pay any more into their pensions.

During his speech at the Institute for Public Policy Research, Alexander will announce that employees earning up to £18,000 will be protected from the average increase in contributions of 3.2% of their salary. Meanwhile, the highest paid could have to pay up to 5% more.

Joanne Segars, chief executive of the National Association of Pension Funds (NAPF), said: “It was clear that the government needed to do something to limit the impact of increased contributions. 

“These proposals spare the low paid and the phased rises make sense. There was a real risk that the poorest would be phased out of their pension.”

Alexander has also warned public sector workers threatening to strike over changes to their pensions could face a worse deal in the future if they reject the government’s plans.

Gail Cartmail, assistant general secretary at Unite, said: “Danny Alexander has raised issues, such as specific contribution increases, which have been raised in the talks.

“Our position is that we entered the TUC-led talks in good faith and, at the conclusion of these talks, we will put the details to our members for their views. Today’s gunboat diplomacy gravely threaten the integrity of these negotiations.”

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