Shetland Islands Council workers are people who care for the elderly and vulnerable. We keep children safe, we keep streets and parks clean, give housing help to those who need it, and give hope to young people with places where they can get advice, help or have fun. We run nurseries, leisure centres and libraries – the list is endless.
Many of us are low-paid women – inflation has been high, but we have a pay freeze meaning we are getting poorer while facing the prospect of further cuts to our terms and conditions, possible redundancies and cuts to services.
Our pensions aren’t a fortune but we pay into them to ensure a bit of decency and security in retirement. The average pension in local government is just over £4,000 a year, falling to £2,800 for women – that’s only £54 per week – in exchange for around six per cent of our wages. If we don’t save into our pensions then we’ll just be pushed on to benefits when we retire.
There is probably a council worker among your friends and family – none of us take the decision to go on strike lightly, but our pensions are important to us, and so are the services we provide. We don’t want to cause anyone inconvenience; we value and use the services we provide (our children go to school too). But we don’t have a choice – if we don’t act now then the value of our pensions will be cut away.
There is a pensions crisis in this country: millions of ordinary people have seen their pension schemes closed or restricted. They face an uncertain future, unlike Sir Fred Goodwin of RBS who has a pension of £13,500 a week.
That’s the real pensions divide in this country – between rich and poor – everyone, wherever they work, deserves a decent pension. We’re taking action to defend ours and to stop a race to the bottom that will mean poverty in retirement for everyone.
The schemes are not in crisis. The health scheme takes in £2 billion more every year than it pays out. This money goes straight to the Treasury, and will plough £10 billion into the coffers over the next 10 years.
The local government scheme in Scotland has funds worth more than £20 billion – equivalent to a fifth of Scottish GDP. It could pay out all its pensions for the next 20 years without a single penny more in contributions.
Health workers already pay between six and eight per cent of their salary into their pension, making a 3.2 per cent hike in contributions a massive hike for many. Staff helped deliver efficiency savings in Scotland £673 million over target last year. Some of this money could have been used to fund the £55 million it would cost the Scottish government next year for NHS staff.
Public sector pension schemes in Scotland have provisions to deal with real increases in costs, like members living longer. Not a penny of the money raised by contribution increases will go into pension schemes. They are simply a cash grab by UK ministers.
Workers covered by the Local Government Pension Scheme (Scotland) welcomed the decision of Scottish ministers not to increase contributions in the LGPS immediately. However, their pensions are still being cut by at least 15 per cent on retirement and other changes could result in them working longer for a smaller pension.
UK ministers could use their budgetary powers and/or UK legislation to force changes to pension schemes in Scotland. This is implied in a recent letter from Treasury minister Danny Alexander to Scottish ministers.
The real pensions crisis is in the private sector – where two thirds of employers do not pay a single penny towards their workers’ pensions. It could cost this country up to £15 billion to support the millions of private sector workers who have been locked out of saving for their retirement.