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 AXA 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.
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. 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 eight percent of salary.
In the survey, 56 percent of people say that pensions will be an important election issue and 36 percent 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 percent) are concerned they will not have enough money in retirement. Paul McMahon, Managing Director of AXA Corporate Benefits, said: “There is widespread public policy debate acknowledging that something needs to be done about the rising cost of public sector pensions, but very little detail has yet emerged on how this might be addressed.
AXA’s research confirms that voters are looking for direction from the main political parties on what solutions they can offer to achieve sustainable funding of pensions in the public sector and, at the same time, to achieve greater equity in the pension provision people will receive when they retire.”
25 March 2010
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