Pensions threat to local authority social workers

Social care workers face paying additional contributions of £300 per year to retain their pensions if the government pushes through money-saving reforms.

That was the warning from children’s services union Aspect, after deputy prime minister Nick Clegg said public sector pensions were “unfair and unaffordable” – signalling that they could be cut.

Local authority social care workers in England, Wales and Northern Ireland are already facing a pay freeze for 2010-11.

A proposal to levy a 1% increase in employee contributions on all public sector pensions, which could save taxpayers around £1bn per year, would raise most employees’ contributions from around 6% to more than 7%. Social workers earning £30,000 would have to pay an extra £300 per year into their pensions under these plans.

Clegg’s statement followed the newly formed Office for Budget Responsibility’s first report, published on Monday. It found that under current spending plans, the Treasury will spend £4bn of taxpayers’ money this year topping up public sector pension payments, rising to £9.4bn in four years’ time.

Nigel Keogh, technical manager for pensions at the Chartered Institute of Public Finance and Accountancy, told Community Care the government would be keen to seek ways in which a greater share of the cost is met by employees.

“Public sector workers, including social care staff, might face an increase in employee contributions in order to take some of the pressure off employers,” he said.

CIPFA research suggests that a 1% increase in employee contributions by all public sector employees across the UK could generate up to £1bn per year.

“An immediate saving like that is going to be very attractive to the government at this stage,” said Keogh.

“When you weigh that up against the potential of the pension scheme being scaled back or closed, some people might see that as a price worth paying.”

Roger Kline, social care spokesperson for Aspect, pointed out that social workers already faced a pay freeze which, with inflation now standing at 3.7% in the Retail Prices Index and factoring in increases in National Insurance contributions, could result in a real terms pay cut of up to £1,000.

He said: “A reasonable pension scheme was always seen as compensation for relatively low pay.

“It is outrageous if social workers and social care workers are being asked to take a further real terms pay cut by government ministers who are on almost the most gold-plated pension scheme around.

“Some staff will say it is better to pay a bit more and keep a final salary-linked pension scheme – and we certainly must not let that scheme go.

“But I think ministers will struggle to find any social workers who think they should be singled out to pay the price of bankers’ excesses.”

Unison, which represents 40,000 social workers in the UK, threatened on Tuesday to ballot its members on holding a national strike if the government cuts public sector pensions.

General Secretary Dave Prentis told the union’s annual conference: “If this government picks a fight with us, then we will be ready.”

Related articles

Unison turns to Acas to resolve social care pay dispute

Social care workers face pay freeze from April

Taxpayers’ Alliance targets local government pensions