23 July 2004
Business leaders have warned that public sector pensions — often regarded as gold standard retirement plans — are not likely to be sustainable in the long term.
As part of a 22-point plan to stave off Britain's looming 'pensions crisis', the CBI business lobby told Public Finance that employers will not tolerate seeing their tax cash being used to fund generous public sector pensions while they are being 'forced' to close occupational schemes.
'Businesses contribute around 50% of UK tax revenues. Future pension reforms are unlikely to find favour… unless measures are taken to reduce this burden,' a spokesman said.
The claim is likely to infuriate some pension experts who believe some businesses are closing schemes simply to cut costs.
Meanwhile, the charity Age Concern has warned that millions of workers on middle-incomes 'are on track for a poverty-stricken retirement' because they do not qualify for means-tested support.
'It's those on a modest wage that will face the biggest shock when their income drops to its retirement level,' the charity warns.
'Someone earning an average wage of £465 per week could see their income fall to £105 if they retire with no other savings — a 78% drop in weekly cash.'