By Max Clarke
An alarming lack of private sector pension provision will place a colossal burden onto the taxpayer.
An estimated two-thirds of private sector employees — 15 million workers - are not in a workplace pension to which their employer contributes, public sector union, UNISON, said today.
This could mean they are forced to rely on benefit top ups paid for by the taxpayer when they retire. UNISON figures reveal that every worker locked out of saving for their retirement costs the taxpayer £15,000 — meaning a potential extra benefit bill running into hundreds of billions of pounds.
The union is calling for decent pensions for all workers — in both public and private sectors. It also highlighted recent studies that have shown decisively that public sector schemes are affordable and sustainable for the long term.
“It is shocking that two thirds of private sector workers are not in a workplace pension to which their employer contributes,” said Dave Prentis, the union’s general secretary. These companies are shirking their responsibilities to their workers, pushing the burden onto the taxpayer. For every worker locked out of saving for their retirement, the taxpayer could get stung for billions more in benefit payments.
“But instead of dealing with skinflint employers, the government shamelessly uses the lack of private sector pensions as a stick to beat public sector workers with. The latest round of attacks on public sector pensions is based on myths and ideology. Research by independent experts such as the Institute for Fiscal Studies (IFS) and the Chartered Institute of Public Finance and Accountancy (CIPFA) prove the schemes are affordable and sustainable for the long-term.
“And the government’s plans to auto-enrole workers into the NEST scheme will not go far enough. Unless we bring all pensions up to a decent level, we are running the risk of condemning a generation of people into poverty in their retirement — and a huge burden on the taxpayer.”
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