Public Service Pensions

Gordon Banks Excerpts

Wednesday 2nd November 2011 Commons Chamber

[Gordon Banks (Ochil and South Perthshire) (Lab)]

Can the Chief Secretary confirm that every penny paid in increased pension contributions will find its way into pension pots?

[Danny Alexander]

As the hon. Gentleman should know, in unfunded schemes there is no such thing as a pension pot. The money is not gathered together and invested. The contributions made today do not in any way meet the costs of the pensions being paid out today. What we are offering is what might be called a new deal for public service pensions, whereby additional contributions and longer working will help to ensure that public sector workers can still have the best pensions available. Many low-income workers will actually receive better pensions in retirement.