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.
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:
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.”