2/10/2009 - Pension Freeze?

Pensions in the news.

The Institute of Directors, with support from the Taxpayers´ Alliance, has produced a report suggesting Britain should freeze State pensions for a year, scrap child benefits for middle-class families and cut one in ten civil service jobs to reduce the Government´s growing budget deficit.

The report states that £50 billion could be saved from the annual budget, which is forecast to be £175 billion in the red during the current tax year, by taking the outlined steps.

The report´s authors said they had aimed to highlight specific cuts rather than to call for vague efficiency savings, a frequent get-out clause when governments try to set budgets. With the national election due by June 2010, the Government is now being forced to look at specific ways to balance the country´s books. This is what the report has tried to do.

The biggest single saving would come from abolishing universal weekly child benefits of up to £20 per child and targeting funds on the poorest families, saving an estimated £8.447 billion.

Some £6.203 billion would be saved by freezing the pay of all public sector workers apart from military personnel serving in combat zones for a year, and more than £2 billion apiece would be saved by making public sector workers pay more towards their pensions and building fewer new schools.

The report also proposed scrapping one in ten jobs in the civil service and a similar proportion of jobs in State-funded health and education services which did not involve direct contact with patients or students.