Public Service Pensions

Debate between Guto Bebb and Danny Alexander

Wednesday 2nd November 2011 Commons Chamber

[Danny Alexander]

I cannot give a specific example, because I do not have the necessary figures to hand, but I can say that I expect the lowest-paid people to benefit most from these arrangements. At present, those on the lowest salaries and with the flattest career paths contribute most to the pensions of the highest earners. The change to a career-average basis will ensure that many workers, particularly of the sort whom the hon. Lady has described, end up with more rather than less income in retirement. I consider that to be a right and proper reward for those people’s commitment to public service.

[Guto Bebb (Aberconwy) (Con)]

I too welcome the statement, but given that economic growth, economic development and job creation in my constituency depend on the small business community, can the Chief Secretary advise owners of small businesses how they should go about amassing a pension pot of half a million pounds before they retire?

[Danny Alexander]

It is true that in the private sector an enormous volume of contributions would be necessary to build up the pension pot that is required to fund the pensions that we are discussing today. The equivalent would be a pension pot of £600,000 or £700,000 a year. That is a measure of the Government’s recognition of the commitment that public service workers make.