AXA calls for clarity on way forward for public sector pensions
29 July 2010
With the balancing of public sector finances a key general election issue, AXA is calling on all political parties to specify exactly how they plan to tackle the rising cost of public sector pension provision, and how a sustainable approach to financing this can be achieved.
New research from AXA1 has highlighted real concerns over public sector pensions amongst those who will be voting in the general election. Six in 10 voters (61%) believe it is unfair that people working in the public sector generally receive better pensions than their private sector counterparts. The research also highlighted that 44% of public sector workers agree. An important factor is that public sector pensions are funded from the taxes paid by all UK tax payers.
Figures calculated by AXA show that a 25 year-old woman working in the private sector would have to contribute almost a quarter of her annual salary every year to receive a pension on a par with her public sector counterpart.²
This is more than double the 10% figure generally assumed for private sector contributions. The NEST scheme put forward by the Government - formerly known as Personal Accounts - will eventually phase in a contribution level of 8% of salary.
56% of people say that pensions will be an important election issue and 36% want the party leaders to address in their TV debate how they plan to tackle the imbalance between public and private sector pension provision. At the same time six in ten people (59%) are concerned they will not have enough money in retirement.