TaxPayers’ Alliance reveals substantial rise in council staff drawing pensions compared to those paying in4

The TaxPayers’ Alliance (TPA) can today reveal for the first time a substantial rise in the number of former council staff drawing pensions compared to the number in work and paying into the Local Government Pension Scheme (LGPS). The new research also reveals that when the one million deferred members of the scheme (those no longer working at the council but not yet eligible to draw pensions) are considered, the outlook is even more alarming.

Click here to read the full report including full council breakdowns
Click here to look up your local data

The LGPS is much more generous than most private sector pensions. The future of the scheme is bleak unless urgent reforms are made. Previous TPA research has found that the equivalent of £1 of every £5 of Council Tax goes on pensions and that there is a £54 billion black hole in council pension schemes.

The key findings of this research are:

• In 2010-11, there were fewer than 1.6 active members of local government pension schemes for every one drawing a pension. Five years earlier there were nearly 1.9 active members for every one drawing a pension. In the wider UK economy, there are 3.2 people of working age for each person of State Pension Age and over.
• In 2010-11, there were 13 local authorities (listed in table 1) where those drawing pensions outnumbered active members by more than two to one. In 2006-07, there were eight.
• The falling old-age support ratio is the result of a rising number of former employees drawing pensions. There were 910,000 former local authority employees drawing a pension in 2010-11, up from 771,000 in 2006-07 and an increase of 18 per cent.
• In 2010-11 there were over 1 million deferred members on the LGPS, 300,000 more than in 2006-07. As more of these members begin drawing a pension, the gap between scheme pensioners (currently 910,000) and active members (currently 1.5 million) is likely to close.
• Across the UK, 345 local authorities have more deferred and pensioner members than they do employees paying into schemes. There are only 61 councils where those paying into schemes outnumber those drawing a pension and those with benefits to draw at a future date.

Click here to read the full report including full council breakdowns
Click here to look up your local data

Matthew Sinclair, Director of the TaxPayers’ Alliance said:

“The Local Government Pension Scheme faces a bleak future as more and more pensioners claim from a pension pot that fewer and fewer current staff are paying into. Unless changes are made so that the local government workers who will benefit from these pensions pay more of the cost, there is a real risk families struggling to afford much less generous pensions will be left with the bill. Unions and councils need to be realistic and ensure reforms are sufficient to deal with the pressures on the finances of town hall pensions. The Government need to ensure that taxpayers aren’t left with a ticking financial time bomb.”

The TaxPayers' Alliance

Britain's independent grassroots campaign for lower taxes

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