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Pension tax relief for high earners costs country £10 billion a year

UNISON, the UK’s largest union, today branded it a ‘national scandal’ that the country’s highest earners get tax breaks worth £10 billion every year on their pensions contributions.

At the same time, low wage public sector workers are being told to work longer, pay more and get less in their small pensions.

This tax giveaway, to the top 1% of earners on more than £150,000 a year, is worth more than three times what the government is trying to raise by taxing public sector workers’ pensions. This is even worse when you consider that top bosses in the UK have average pensions worth 34 times more than the average public sector pension.

Dave Prentis, UNISON General Secretary, said: “This is a national scandal. Whilst top bosses and the mega rich benefit from ten billion pounds worth of tax breaks, low paid public sector workers are left fighting for their small pensions. They’ve already had two years’ of frozen pay at a time of high inflation, and hundreds of thousands are facing the prospect of losing their jobs. The Chancellor’s claim that we are all in this together just does not ring true.

“£10 billion is three times the amount the government wants to raise by imposing a hardship tax on public sector workers including nurses, social workers, teaching assistants, paramedics and PCSOs.

“Most public sector workers won’t retire on a fortune. Average pensions in local government are just £4,000, dropping to just £2,800 for women. In the NHS the median pension for women is £3,500 – hardly gold plated. That’s after going without between 5 and 8% of their salary year in, year out. Meanwhile average pension pots for FTSE 100 Directors are a whopping £3.91m.

“It’s time the government took a long, hard look at who is breaking our economy. It is the mega rich in the City who got us into this mess, but it’s the low paid and hardworking families who are paying for the crisis.”

 

Notes:

Members of the UK’s largest union including paramedics, bin men, dinner ladies, hospital cleaners and home carers, along
with millions of other public sector workers, are preparing to take industrial action on 30 November, over government ministers’ plans to make detrimental changes to their pensions.

The union has been in talks for more than eight months, trying to reach a deal to avoid action, and the talks will
continue up to and beyond the 30 November. Despite a recent statement by Treasury Chief Secretary, Danny Alexander, there is still no offer the union can put to its members, this can only come from scheme specific negotiations. And
the government leaving ti until late in the day to come forward with an improved set of proposals makes action inevitable.

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