Who will subsidise future private sector pension schemes?
As the UK government readies itself for the release of various changes to public sector final salary pension schemes many are asking who will subsidise future private sector pension schemes which continue to struggle. The UK government took away various tax incentives some time ago and many believe this situation needs to be reversed in order to give the private sector an opportunity to replenish pension funds and allow people to plan for the future with confidence.
Currently the UK government has liabilities in the tens if not hundreds of billions of pounds in relation to public sector final salary pension schemes which UK taxpayers will at some stage need to fund. Despite the fact that the unions are set to strike in order to protect these generous pension scheme, as you would expect, there really needs to be some middle ground found as soon as possible. There is speculation that the UK government will ask public sector workers to contribute more to their pension funds although this has yet to be confirmed.
The situation regarding final salary pension schemes in the public sector cannot continue any longer and while a decision to change the conditions and funding requirements will make David Cameron almost unelectable next time round, he appears willing to take this chance.
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