Nigel Farage has called for a crackdown on public sector pension “Ponzi schemes” after new figures revealed concerning details about local government pensions. The Reform UK leader warned that these pensions are the “biggest ticking time bomb” in government finances. Mr.
Farage urged ministers to hold a debate on the issue. He accused successive governments of neglecting the problem. His comments follow reports that £1 in every £4 raised in council tax was spent on local government pensions last year.
He told The Telegraph: “Public sector pensions are the single biggest ticking bomb in our government finances. It’s a massive, massive problem.”
“We can talk about GDP and the national debt, but none of that includes any guestimates as to what that will cost us in pension payments in 15 to 20 years’ time. We now have pensions apartheid between the private sector and public sector.
There is a massive, massive gulf. They’re Ponzi schemes, all of them.”
“We have to address it, we have to deal with it, but to date nobody has. By turning a blind eye for decades, we’ve given ourselves a massive problem.
Council tax burden concerns Farage
The country is going to need a lot of growth in the next few years if we’re going to have a chance of dealing with it. To start with, let’s have an honest debate about the size of the problem.”
The Local Government Pension Scheme offers retirees a regular income for life, which increases each year with inflation.
Both employers and employees contribute to the scheme. According to an investigation by The Times, councils have paid significant portions of their budgets into these pensions. Separate research by The Telegraph shows there are around two million such pensions already in payment to retirees.
The Local Government Pension Scheme is funded, meaning contributions are invested to generate the money needed to pay future retirees. It was reformed along with all major public sector pension schemes in 2014-15 to become more affordable. However, analysis shows the average household effectively pays more than £230 a year into the pension scheme via their council tax bills.
A spokesman for the Local Government Association, which represents councils, stated, “The Local Government Pension Scheme is the most robust public sector pension scheme. Compared with other major public sector pension schemes, the employer contribution rates are also generally much lower.”
Most public sector pensions, such as those paid to retired teachers, civil servants, soldiers, and NHS staff, are not funded. This means that contributions are quickly spent on paying existing pensions rather than being invested for future needs.
A government spokesperson said: “Public sector pensions are an important part of the remuneration package for hard-working public sector workers and strike the right balance between rewarding them and being fair to the taxpayer.”
Mr. Farage’s Reform UK party is seen as a growing force in Westminster, with increasing clashes with mainstream parties over key financial issues.
