Stick to the facts about pensions

17th September 2004 at 01:00
Some futurologists predicted that by the start of the 21st century most of the over-50s would be retired. Machines and computers would do everything for us -including teach our children. The reality, however, is that butchers, bakers, candlestick-makers (there are still a few) and teachers must expect even longer working lives.

The reasons are well known. Millions of baby-boomers are nearing retirement, or thought they were, and we are living longer than is convenient for the Exchequer.

Ministers have tried to portray the raising of the teachers' retirement age from 60 to 65 as a "modernising" development - and claim that many vigorous 60-somethings are eager to go on teaching. This is largely fantasy, of course. The retirement age is being increased to save money. The Government reckons it can trim 2 per cent off the teachers' annual salary and pensions bill of about pound;18 billion. And it has told the unions it will return half of that saving in the form of improvements, such as dependants' pensions for unmarried partners. It also says it will increase death-in-service benefits (no hollow laughter, please).

But teachers should not get too dispirited by these developments. Their pensions scheme will still be more generous than most - particularly if the unions can win a few more concessions. Teachers may not get the lavish pensions enhancements offered to the many "surplus" civil servants who are leaving Whitehall this autumn. But they will still be better off than most people. Only a third of British workers now have final-salary-related pensions and they are loath to continue funding higher public-sector pensions.

We must therefore acknowledge that the Government, like almost all other European governments, was obliged to address the spiralling cost of public-sector pensions. Furthermore, the Government was wise to adopt the staged approach to pensions reform (teachers over the age of 50 will not be affected by the changes).

But a little more frankness in future government pronouncements would not go amiss. The "modernising" argument should be ditched. All we need are the facts.

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