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Public sector retirement age to rise to 66

Public sector retirement age to rise to 66

Category: Pensions

Updated: 28/11/2017
First Published: 17/06/2011

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The Government has confirmed it intends to go ahead with plans to match the pension age for public servants to the state pension age, which is set to increase to 66.

The controversial plans also mean that public sector employees will have to pay more into their pensions, although low paid workers will be spared.

Under the proposals, most public sector employees will see their retirement age rise from 60.

All bar those in the army, police and fire service will have their pension age linked to the state pension age, which is due to increase to 66 by 2020.

In addition, workers will on average be expected to contribute an extra 3.2% a year to their pensions, with the increase phased in between 2012 and 2014.

However, low earners will be spared or have the rise they have to pay capped.

Anyone earning less than £15,000 will be exempt, while those earning between £15,000 and £18,000 will have their contribution increase capped at 1.5%.

The generous final salary pensions are also set to be scrapped and replaced with a defined benefit scheme which pays out depending on career average earnings.

The Government has, however, agreed that pension benefits built up prior to the introduction of the changes will be protected.

Responding to the proposals, TUC general secretary Brendan Barber said the Government appeared to be making its intentions clear before discussions had taken place with the unions.

"At such a critical time in complex negotiations this is a deeply inflammatory public intervention with a clumsy mix of announcements apparently designed to pre-empt the talks, coupled with crude threats that even worse terms might be imposed if unions refuse to acquiesce to this assault on their pensions," he added.

"Many of the detailed proposals set out by Danny Alexander [chief secretary to the Treasury] have not even been put to the TUC negotiators, and the Government has yet to give a response to specific proposals tabled by the trade union side."

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