Pensions Decline Hitting Middle Income Earners - Oakeshott

6.26.00am GMT Mon 15th Nov 2004

The chasm between Britain's two nations in pension provision is widening month by month, Lord Matthew Oakeshott, Liberal Democrat pensions spokesperson in the House of Lords, said today during the third reading of the Pensions Bill.

Lord Oakeshott's comments follow last month's report by Adair Turner which points out that the public sector employs 18% of the population, with 17% of total earnings, but has 36% of the pension rights.

Lord Oakeshott will be moving an amendment to give employees of the Pension Protection Fund a good quality private sector pension rather than a civil service pension.

Lord Oakeshott said: "The chasm between Britain's two nations in pension provision is widening month by month. In twenty years' time about three-quarters of people with good quality pensions will be in the public sector, with the rest of the country out in the cold.

"Under Labour, company pension schemes have become an endangered species, with far fewer workers on middle incomes now building up decent pensions. Whilst the poorest will be entitled to means-tested benefits, and the richest have continued to do well, the impact of the decline will be concentrated on middle income earners working in the private sector.

"The Pension Protection Fund is the place to start bridging the chasm between public and private sector pensions. PPF staff should be the last people to be hermetically sealed in a risk-free, inflation-proof Civil Service pension capsule, at the expense of the private pension fund members whose pensions they are paid to protect."