The gap between pensions in the public and private sectors is now so huge that even the Labour Party recognises that something has to be done to diminish it. Here's an illustration. If you have been employed by the state for most of your career, you will retire with a guaranteed pension of two thirds of your final salary. So a middle-ranking civil servant retiring on a salary of, say, £60,000 will receive an annual payment – for the rest of his life – of £40,000. To achieve that sort of income, someone who has worked in the private sector would have to amass savings in his personal pension fund of well over £1 million: an impossible amount. someone who has worked in the private sector would have to amass savings in his persona pension fund of well over £1 million: an impossible amount. Defenders of the existing system point out that the typical pension for local government employees s a mere £3,000 a year, or £4,000 for those in the NHS. But compare that with the private sector, is a mere £3,000 a year, or £4,000 for those in the NHS. But compare that with the private sector, where between 10 and 15 million workers have no occupational pension at all, and won't receive anything above the minimum state pension. Furthermore, to get a pension of £3,000 a year in most private schemes, you have to have saved a "pension pot" of around £80,000. Given the fees that you will have been charged by the pensions industry for investing that money as you saved it, you will have to put away much more – perhaps 25 per cent more. And there's no guarantee, at the end of the process, that you will have managed to secure yourself that income: if you are unlucky enough to retire just after the stock market has fallen significantly, or interest rates have gone down, you may find what that you have will only buy you an income of £2,000 or less
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