1 in 4 Not In Council Pension

One in four council workers already opted out of pension scheme shows proposed contribution increases to local government pension schemes would be a disaster.

Government proposals to increase contributions by 3.2% to 9.6% will make this worse, jeopardising the entire Local Government Pension Scheme for its four million members says GMB


A new GMB study shows that the participation rate in the Local Government Pension scheme (LGPS) ranges from a low of 46% in Central Bedfordshire to 99% in Sheffield. In 46 councils one in four or more of all council workers including low earning care workers, teaching assistants, cleaners and support staff are not members of the pension fund. The study also shows that in the five years to 2011 these has been a 7% overall drop in workers participating in the LGPS. Overall 1 in 4 workers elegible to be in the scheme are opted out of the scheme concluding that they cannot afford to be in the Local Government Pension Scheme. The overall participation rates for 118 Councils in England are shown below.

GMB established that data on participation rates in the current Local Government pension scheme using the Freedom of Information Act. GMB says that this data proves that increasing the contribution rate by 3.2% from 6.4% to 9.6%, as part of the proposed £1billion Osborne Pension Tax which is the target Treasury yield from the higher employee contribution rate of 9.6%, will drive thousands more away from pension saving while doing nothing to increase the funding level of the scheme. See Note 1 and 2 below.


Percentage of eligible employees participating in the Local Government Pension Scheme according to responses received from 118 Councils by GMB to a Freedom of Information request.


Central Bedfordshire 46%
Enfield 50%
Darlington 55%
Stockton on Tees 55%
Kingston 56%
Middlesborough 57%
East Sussex 58%
Tower Hamlets 58%
Hertfordshire 59%
Portsmouth 59%
Lancashire 60%
Isles of Scilly 61%
Barking & Dagenham 64%
Dudley 64%
Essex 64%
Plymouth 64%
Bradford 65%
City of London 65%
Slough 65%
Newham 66%
Swindon 66%
Worcestershire 66%
Bristol 67%
Hartlepool 67%
Cornwall 68%
Greenwich 68%
Sandwell 68%
Rutland 69%
Sunderland 69%
Bracknell Forest 70%
Camden 70%
Haringey 70%
Leeds 70%
Luton 70%
Walsall 70%
Bolton 71%
Durham 71%
Liverpool 71%
Windsor & Maidenhead 71%
Brighton 72%
Halton 72%
Hull 72%
West Sussex 72%
North Tyneside 73%
Herefordshire 74%
Lambeth 74%
Hampshire 75%
Isle of Wight 75%
Leicestershire 75%
Redcar 75%
Wandsworth 75%
Kent 76%
Manchester 76%
Warwickshire 76%
Barnet 77%
Bedford 77%
Cheshire West & Chester 77%
City of York 77%
Leicester 77%
Wolverhampton 77%
Kirklees 78%
Medway 78%
North East Lincolnshire 78%
Rochdale 78%
Staffordshire 78%
Telford 78%
Blackpool 79%
Cheshire East 79%
Gateshead 79%
Hammersmith & Fulham 79%
Oxfordshire 79%
Surrey 79%
Waltham Forest 79%
Wokingham 79%
Solihull 80%
South Gloucestershire 80%
Bath & NE Somerset 81%
Buckinghamshire 81%
Milton Keynes 81%
North Yorks CC 81%
Redbridge 81%
Gloucestershire 82%
Sutton 82%
Wirral 82%
Barnsley 83%
Bournemouth 83%
Islington 83%
Northumberland 83%
Peterborough 83%
Sefton 83%
Stoke 83%
Trafford 83%
Birmingham 84%
Doncaster 84%
North Somerset 84%
Ealing 85%
Harrow 85%
Lincolnshire 85%
Nottingham City 85%
Wakefield 85%
Bromley 86%
Calderdale 86%
Cambridgeshire 86%
Rotherham 86%
Southwark 86%
Westminster 86%
Hackney 88%
Hillingdon 88%
Derbyshire 89%
North Lincolnshire 89%
Nottinghamshire 89%
Newcastle 92%
Derby 95%
Lewisham 95%
Somerset 95%
Richmond 96%
Bexley 97%
Sheffield City 99%


Brian Strutton, GMB National Secretary for Public Services, said:


“Low paid council workers have had a two year pay freeze and are finding it increasingly hard to save for their retirement as our survey shows. Government proposals to increase contributions by 3.2% to 9.6% would make this worse, jeopardising the entire Local Government Pension Scheme for its four million members. We need sustainability and fairness that encourages people to invest in their retirement and not be reliant on welfare benefits.


The Chancellor is insisting on raising £1 billion from the LGPS in a tax that will see central government grants to local authorities cut and contribution income to the scheme plummet as members leave the scheme. In a survey of more than 2,000 scheme members 39% said they would leave the scheme if the average contribution rate increased to 9.6%.


The LGPS pays out on average £4,200 a year to LGPS pensioners, the lowest in the public sector and has an annual positive cash flow of £4 billion. Yet the Chancellor seeks to wipe this out overnight with a doomed policy that will destroy what should be a viable, sustainable means of funding retirement for millions of front line public sector workers.


Government has said that it wants people to save for retirement but is failing to ensure low paid workers stay in their pension scheme. This causes the legacy of under saving that the Turner Commission warned about five years ago, a legacy that will leave millions in poverty in later life.


As the government prepares to introduce auto-enrolment in the private sector it should be examining why 20 years of auto-enrolment to a good quality scheme still leads to a quarter of local authority employees opting out.”


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