The pension 'delusion': Unless you work longer and live more frugally you won’t be retiring in comfort says mandarin (who's on 200,000 a year)



23:32 GMT, 18 December 2012

Sir Bob Kerslake, the head of the civil service, said it was 'absolutely clear' the pension age will have to rise in the coming years

Sir Bob Kerslake, the head of the civil service, said it was 'absolutely clear' the pension age will have to rise in the coming years

People are ‘deluding’ themselves if they think they can enjoy a comfortable retirement without living more frugally and working longer, the head of the Civil Service said yesterday.

Sir Bob Kerslake, who will benefit from a gold-plated final-salary pension funded by the taxpayer, said he believed ministers had failed to have an ‘honest debate’ with the public about the issue.

He told a Lords committee that it was ‘absolutely clear’ that the pension age would have to rise in the coming years – but that the public had not ‘faced up’ to this.

And he said people needed to come to terms with the fact that they would have to make do with poorer circumstances in retirement than current pensioners.

Last night a taxpayers’ group condemned his comments, saying it was fat-cat civil servants who were deluded if they thought their generous pension arrangements were fair.

And a pensions expert said that for private sector workers, living more frugally and working longer looked set to be a fact of life.

But for public sector workers, it was not.

Sir Bob, who is also Permanent Secretary of Eric Pickles’ Department for Communities and Local Government, earns 200,000 a year.

He was made head of the Civil Service last year when Gus O’Donnell retired at just 60 on a pension worth 105,000 a year.

Sir Gus O'Donnell retired at just 60 last year

Sir Gus O'Donnell retired at just 60 last year

what a whitehall mandarin gets

what a whitehall mandarin gets

Sir Bob, 57, will have a smaller pension
than his predecessor, because he spent most of his career working
outside central government, and because recent changes in civil service
rules mean he will have to work until he is 65.

But the pension he will
receive in eight years’ time will be far more generous than most private
sector workers.

Appearing before the House of Lords
committee on public service and demographic change, Sir Bob was asked
about how government departments were working to adapt to the changing

He said longer life expectancies should be something to celebrate but warned there were major challenges ahead.

'And to that extent I think the Government have faced up to that issue, I’m not yet sure that the country has faced up to that yet.’

He added: ‘There are really only three things you can do about pensions: one is to pay more when you are in work; the second is to work longer and the third is to live with less when you retire.

‘Probably all three are going to have to come in to play here. Unless as a country we face up to that issue, we are in danger of deluding ourselves about the challenge.

‘So are we ready I think in one sense we understand the issues. Have we had the honest debate with the people of this country about these issues I think not.’

Last night Robert Oxley, from the TaxPayers’ Alliance, said: ‘The only people kidding themselves are civil servants who seem to believe they can continue to enjoy such overly generous pensions at taxpayers’ expense.

‘Sir Bob Kerslake’s words reflect an arrogance in Whitehall which really angers hard-pressed families.’

Ros Altmann, a former Treasury pensions adviser, said: ‘He’s right that without a generous final-salary pension scheme which is in line with inflation like the Civil Service offers, it is difficult to see how people can have a comfortable retirement unless they work longer.

‘The days when employees can rely on their employer to give you a decent pension are over in the private sector. But in the public sector, employees are still guaranteed good pensions with unlimited inflation-linking.’