Final-salary pensions guarantee is 'a sign of inequality'

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Final-salary pensions guarantee is 'a sign of inequality'

Mon 24th Aug 2009

It is a sign of inequality to have bankers' final salary pension schemes guaranteed by the taxpayer, according to an industry expert.

Dr Ros Altmann, an independent policy advisor, claims it is unfair that bankers' pensions are guaranteed even if their employers fail, while if you work for any other company there is no taxpayer protection.

She highlights Northern Rock and Bradford and Bingley as examples where there are £100 million deficits in each case to be covered by the government, although it is not clear how they will be funded.

"Ministers have always insisted that, if final salary pension schemes fail, taxpayers could not afford to replace pensions in full," she says.

Dr Altmann is calling for the government to take a consistent approach to pensions and feels that an independent enquiry may be necessary to work out the long-term consequences of pension schemes.

Simon Connor of Lincoln Financial group recently commented that the demise of final salary pension schemes will mean more people will begin looking at other ways of increasing their retirement income.

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