Drs' payrise should be funded by cutting 23.7% govt pension contribution

Yes. State pensions are going to have to be means tested and this should happen asap. This is the primary thing that is crippling the country financially, along with the failed NHS model of healthcare.

Auto-enrolment needs to be mandatory with no opt out and a similar scheme put in place for those self-employed.

The triple lock should be downgraded to a single lock of rising at the rate of earnings so that older people’s incentive to vote for policies that impoverish those of working age is removed.

And public sector pensions need urgent reform to bring them in line with private sector pensions and ensure that any DB schemes are fully funded by those receiving the benefits from them, removing taxpayer underwriting.

The employee superannuation contributions are also high, 9.8% for an F1, increasing to 12.5% by the time they're on 58k. Some opt out as they can't afford it. Which may please the OP.

I don’t know about NHS but there’s 50/50 in LGPS which seems like a pretty fair compromise. The NHS should adopt similar if they don’t already.

50/50 is your pension contribution is halved, and you accrue half as much pension, so 1/98 of your pensionable pay rather than 1/49. You retain other pension related benefits such as the death in service benefit.

But it’s still funded by current contributions rather than someone actually accruing a state pension that is sat waiting with them. So it relies on current tax payers income. When we start running low on tax payers we’ll also be running low on taxes to pay the state pensions. So it will still be unpayable in the future.

The semantics are the same, public sector pensions will be unpayable when our working population declines, and so will state pensions.

I‘m not suggesting they will do it, just answering your question about why it isn’t a “ponzi scheme” like a pension fund.

The penalty would be all the people who now can’t afford to live and need the replacement benefits, alongside the admin cost of processing all the claims.

Plus no matter how expensive it is they’ll never do it because it would be the death of their party.

It’s not the same for state pension because there is no deficit payment due. The government could just stop paying state pension without penalty.

for a pension fund to stop paying a pension they would have to fund millions likely billions go fund the deficit. In cash, immediately.

accounting standards mean that companies do take the hit for deficit or benefit of growth for their share of pension scheme in their annual accounts. So it wouldn’t necessarily bankrupt the organisation, but finding the cash would be quite something else.

Surely it’s the same for state pension?

pensions (state, public, and private) are all going to have to look very different in a just a couple of decades time. But that’s a bigger issue than just public sector pensions.

your proposal would work in a define contribution scheme (most private pensions) where pension payout is based on what you put in, and is also highly variable. It doesn’t work in a define benefit scheme such as the nhs where payouts have little link to what is paid in or market performance.

it is also a terrible idea to make it easy for young employees to opt out of pension, as those years make a tremendous difference in the final pension pot. I have multiple pensions from multiple countries (making it difficult to combine) but one of my biggest pots is the one I set up 22-28 years of age - not a lot paid in, but compound interest means it is going to be 25-30% of my final pot. 10-15% of earnings into pension (combining employer and employee contributions) should be the norm from the beginning of employment

Final Salary scheme shut to new entrants around 10 years ago, its still a db scheme though, just using career average rather than final salary. It's still an excellent scheme, albeit not as good as it used to be.

Not the case anymore - I recently rejoined my old firm after 5 years of freelance and the standard pension offer has moved from 5-10% of total salary depending on tenure to 3% of ‘eligible earnings’ which is essentially the statutory minimum and translates to <1% of my salary before bonus. Husband has found the same when interviewing- very few firms offering more than the statutory minimum for new employees in high wage, high demand and senior professional roles. Potentially a response to difficult economic times and redirecting comp to talent priorities (headline salary) over benefits, but it is a far cry from public sector and honestly not sure how anyone builds a sufficient pension on the statutory minimum.

I think theoretically it is correct that public sector pensions should come up and end, but practically the poster above is right it isn’t something you can just do because it would be prohibitively expensive.

the only solution is to introduce a 2 tier pension system, closing the DB scheme to new entrants and phasing out the DB schemes as pensioners die off. It would take 50 years

@eyeses The Telegraph today suggests that the Government could fund a significant payrise to Resident Doctors by reducing our surprisingly high payments into their pensions.
I was hoping you meant cut government pensions.
IMHO that would be great answer
And MPs should not be allowed to stand if they've got their hands in pots of money with HMRC in close liason

Don’t forget the untaxed lump sum from the pension too! Holidays for life!

Yes, of course that's what I'm sticking around for! It's not for the joy of working in the NHS..

The NHS pension is wildly generous. DH (consultant with managerial responsibilities) is paid £180k pa and his pension will be worth >£100k pa at 65. Admittedly that includes a few years in the “old” scheme.

An annuity that size would require a pension pot of well over £2 million. Now multiply that by 60,000 (current number of NHS consultants) and it helps to explain why we’re turbofucked as a country.

I benefit personally from the scheme, but I still think it’s ludicrous to offer this kind of benefit, particularly in the context of a 23-odd % raise, without pension reform.

@Mithral It doesn’t make sense. They probably had non working years at he with dc. That’s what I did and of course it lowers pension.

We cannot afford these pensions. The total amount doctors get should be quoted and early retirement options. They simply don’t need to work the years everyone else does. I cannot believe it’s taken Telegraph journalists this long to work out the vast amount we are paying. No wonder foreign doctors want to work here - it’s the ultimate golden gravy train. We cannot have such imbalance and we compare apples and pears in terms of pay packages. The Doctors control the narrative and no one questions it. I’m not sure this money sits in the bank though. How would we transfer future pension payments to payments now?

I totally agree with the strikes.
more and more jobs being given to oversees as opposed to those who have gone through the Uk education system or university.

more and more are now seeking jobs oversees as a result
Qualified nurses who are unable to get a job and are applying as health care assistants in care homes
and yet we need more doctors and nurses? Can Wes streeting explain?

The point is that would cost more money and would not represent any immediate savings to the NHS or Government.

This genuinely does surprise me - were you in the pension scheme from 1977 until you retired? What % of your final salary does that represent? Did you opt out or something?

I don't doubt you at all just trying to understand. I have a DB pot from working for just 4 years in a final salary scheme on a lowish office admin wage in the late 90s and it's forecast at £2,500 per year so lots less than yours but in sounds like you were in the scheme for 10 times the years I was so I can't get it to make sense.

At least that would reduce the tax burden on our children and grandchildren.

The “issue” is that many of these schemes are unfunded ponzi schemes with hundreds of billions of liabilities that will be unpayable when our population declines drastically due to the falling birth rate.