According to the Office for National Statistics only 46 per cent of staff saved for a workplace pension in 2012, the lowest figure on record. 32 per cent of private sector workers were in a pension scheme as opposed to 83 per cent in the public sector. Of those in a public sector scheme over 90 per cent were in a final salary scheme compared with 26 per cent in the private sector. When the Office first started collecting figures in 1997, 55 per cent of all workers were in a pension scheme.
The National Association of Pension Funds (NAPF) says the situation of only a third of the private sector workforce saving into a pension is unsustainable. “People simply will not be able to retire in comfort, and will lean more heavily on the state.” It warns that the government’s auto-enrolment programme will not halt the decline.
Meanwhile, after sham consultation on the use of local government workers’ pension schemes, the government has now introduced proposals to access the estimated £150 billion of workers’ money invested in their pension schemes for investment. Councils can now invest in local infrastructure projects between 15-30 per cent of the funds from the pension schemes. Effectively this will release up to £45 billion for investment. Such interesting descriptions are forthcoming from government ministers as “freeing up”, “unlocking”, “getting Britain building”.
Workers have never opposed wise investment of their pension schemes. Indeed, the Local Government Pension Scheme funds the top ten per cent of British industry. What workers are more concerned about is the use of assets to fund private equity schemes, property development in the newly created Pensions Infrastructure Project - PIP to its friends. Remember the Private Finance Initiative, the Public Private Partnership and similarly fraudulent schemes which supposedly were to build schools, hospitals, roads etc?
The lifting of the investment cap is an attempt by the Coalition to get workers to rebuild Britain’s infrastructure after they have gutted proper investment and state support for such projects. Osborne is claiming £22 billion will be invested in schemes he has cut.
Among the contributory factors to the pension schemes crisis of the past 15 years have been dodgy investments, employers’ pensions holidays and employers’ abuse of pension funds. Now we have yet another pension fund raid by the capitalist class carried out by its government and City spivs. ■