Standing on a financial cliff edge
Surely at a time when the cost of living is rapidly increasing it’s time to stop the excess into the local authority pension scheme?
The country is standing on a financial cliff edge which will make the Great Financial Crash in 2008 look inconsequential.
UK spending is uncontrolled, with the taxpayer, the all-giving magic money tree, likely to be squeezed further in the October 2026 Budget.
We are told there is no other way, but let’s consider options which are well within political controls.
An article in the FT Advisor under a Freedom of Information request states “responses from 254 of 317 councils showed that local authorities spent an average of 23.5 per cent of council tax revenue on pensions contributions.”
Surely at a time when the cost of living is rapidly increasing it’s time to stop the excess into the local authority pension scheme?
We could use these savings to reduce council tax bills, or redirecting these monies, for example, to adult social care, or to stop corridor care in hospital.
Public sector pensions are currently unfunded by £1.4 trillion, a liability which is being funded on a pay-as-you-go basis by current and future taxation.
To put this into context, the total tax take from all sources in 2024/25 fiscal year amounted £1.139 trillion, 39 per cent of the UK gross domestic product.
This is unsustainable, but politicians are unwilling to face the difficult fiscal truth and tax the low-lying fruit, rather than face the tough but essential decisions to take this country forward.
Leadership starts from the top: how about an announcement in the October Budget that new membership into the MP pension scheme is stopped and that a money purchase pension scheme, along the lines of workplace pensions, is established for them, to start to control public sector pensions debt?
Surely it is only fair that we are all in this together?
The time has come for the Government to take the difficult decisions for the benefit of all of us.
Put money back into the electorate’s control and allow us to spend our hard-earned money and assist in the UK’s economic growth.