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Pay And Pensions

Volume 979: debated on Thursday 21 February 1980

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asked the Minister for the Civil Service whether the amount paid out to civil servants by way of pension in the financial year 1978–79 was greater than the amount contributed by serving civil servants and by the Government in notional terms as a proportion of their pensionable pay; and by how much pay would have to be increased if inflation proofing were to be removed, and at what total cost to the Exchequer.

Total expenditure under the Principal Civil Service Pension Scheme in 1979–80 is expected to be around £580 million, of which about a third represents the cumulative cost of inflation-proofing. Current annual payments by civil servants through direct contributions and salary reductions amount to about £266 million, or 46 per cent. of the current pension bill. If Civil Service pensions received no increases, the deduction from pay assessed by the Government Actuary in his 1979 report would be lower by 4·2 per cent. The annual cost to the Exchequer of a 4·2 per cent. increase in pay would be about £170 million.