By Richard Johnstone | 24 October 2011
Unison has condemned the government’s planned increase in public sector pension contributions next year as ‘economic suicide’.
The public sector union, which is balloting members to take strike action next month over the increases, warns that the changes might make more workers opt out of the schemes. This could end up costing taxpayers £2.5bn a year in means-tested benefits in the long term, it argues, as retired workers rely more on the state.
Unison’s research finds that the increases, announced earlier this month, could affect almost 50% of households in Britain with more than one worker.
It warns that the proposed rises – averaging 1.5 percentage points – would subject take-home pay to an ‘unprecedented squeeze’, reducing household spending.
Nurses on £24,355 would pay around £283 a year extra by 2014/15. If they have children and a partner working in the private sector on the average private sector wage, they would lose £2,136 a year by 2012, once spending cuts and tax and benefit changes are taken into account.
Teaching assistants on £21,601 with children and a partner in the private sector, on the average wage for construction, would lose £2,224 a year as a consequence of cuts to services. Their pension contribution increases would total £388 by 2014/15.
Unison general secretary Dave Prentis said that the pension plans could hit economic growth.
He said: ‘Many families include a public sector worker, and government ministers are telling them they must pay a lot more into their pension.
‘Taking money out of family budgets now is economic suicide – the country needs people to be spending, and fuelling our recovery, not too frightened to go to the shops.’
