Mind the gap, warns IoD

18 October 2005

Private Sector set to Subsidise Early Retirement for Public Servants

The pensions’ gap between the public and private sector was blown open today as the Government negotiated a settlement with the unions on the retirement age for public sector employees, the Institute of Directors (IoD) said.

Miles Templeman, Director General of the IoD said:

“The Government have caved in to the trade unions at a time when strong leadership was required. New entrants will now retire at 65 but existing public sector workers will continue to retire at 60. Someone joining the civil service last week will still be able to retire at 60 in 40 years’ time.

“Today’s agreement is a backward step and will widen the gap between public and private sector pensions. In 40 years time it is almost certain that nobody in the private sector will be able to retire at 60 with a full final salary pension.

“We will certainly try to persuade the Government to review this decision at the earliest opportunity.”