Hymans Robertson survey shows more workers willing to retire at 70

The popular view is that public sector employees – in work or in retirement – are featherbedded compared to private sector workers, but a nationwide survey by Hymans Robertson, the benefits and investment experts, indicates that public sector workers and pensioners are neither comfortable nor comforted.  

More than half (54%) of public sector workers either think that private sector workers have the same working and retirement benefits or are better off. And one in ten public sector workers believe they will be worse off than their private sector peers when they retire. 

Ninety two percent of public sector workers and pensioners surveyed by Hymans Robertson do not know what their final pension will look like or how and where it is invested. Indeed, the immediate concern of public sector workers appears to be the pound in the pocket – 42 percent would currently prefer more in their pay packet in place of pension contributions. Meanwhile, more than a quarter of those workers facing immediate ‘threat’ of retirement would consider working until the age of 70 in order to safeguard their retirement income.

Further survey findings:

The majority of public sector workers feel their pensions will be subject to the same pressures faced by the private sector – 16% say this is already the case

• Those currently working are very worried – 63% of public sector workers will rely on their pension as their main source of income in retirement

• Almost all (92%) of public sector workers don’t know what their final pension will look like or how and where it is invested

• Nearly half (48%) are unaware of any changes to their pension scheme – at a time when all the major public sector schemes have been subject to review or change

• Almost a third of public sector workers are worried about redundancy (31%), rising to 35% amongst local government employees

• One in three respondents cited security as their main reason for working in the public sector, peaking at 46% amongst local government workers and 50% in the Police and Fire Services

• If public sector benefits were to be reduced, some 32% of public sector workers would consider a move to the private sector

• Alison Murray, partner at Hymans Robertson, said: “These findings reflect the simple fact that those in the public sector are not insulated from the effect of the current recession. Irrespective of the pension issues, they will have seen the value of their property plummet and their investment income slashed and in many cases the amount and security of household income will have been affected through a partner having been made redundant or their hours reduced. 

“Yet there is certainly an over-reliance in the public sector on pensions as the only source of retirement income. This is concerning given very low levels of average pensions in some cases, from the Local Government Scheme in particular. It is also worrying to note that 30% of those public sector workers surveyed are not members of any public sector scheme, with the highest proportion of non-members drawn from the least wealthy – 46% of respondents with household assets of less than £20k said that they were not a member of a public sector scheme.”

John Wright, Head of Public Sector Consulting at Hymans Robertson, said: “With the gap between pension provision in the public sector and that in the private sector continuing to widen as more private sector schemes close, it is more important than ever that the public sector demonstrates the value for money for pension provision. This is difficult to do if 54% of public sector workers think that private sector workers are the same or better off. Improving the quality and effectiveness of communication seems to us to be a vital part of any further review of public sector pensions.

“The sustainability of public sector pensions is dependent on balancing the cost and benefits and demonstrating value for taxpayers. The survey findings show that a substantial proportion of public sector workers are prepared to defer their retirement in order to safeguard their financial future when they do retire. The Government would be irresponsible if it did not introduce policies to facilitate this fundamental shift in public sector workers’ attitude to work and retirement.”

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