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Taxation, work and welfare

Home >  Taxation, work and welfare >  Public Service Pensions (PSP) > Why are pensions changing?

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Why are pensions changing?

Changes are being proposed to public service pensions because people are living longer. Someone retiring today can expect to live 10 years longer than someone who retired in the early 1970’s. This is great news. But these extra years in retirement mean that the cost of providing pensions is rising.
 
In the ten years from 2000 – 2010 the amount of money being paid out from the five largest public service pension schemes rose by a third to £32bn. That’s more than the Government spends on law and order - police, prison and the courts.

The Government has a duty to make sure that the cost of public service pensions is sustainable in the long term. It must also share these costs fairly between employees and other taxpayers.

In March 2011 an independent report was published on public service pensions led by Lord Hutton, a former Secretary of State for Work and Pensions. The report sets out recommendations for reform, which were accepted by the Government as a basis for discussion with schemes and trades unions.

You can access full details of this review and the report below

• Independent Public Service Pensions Commission

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