Average civil servant earns less than a private sector worker

Thrugelmir

Full-time civil servants earn less than their private sector counterparts, according to official government data released today.
Median earnings excluding overtime or one-off bonuses were £22,850 in 2009, and nearly two thirds of civil servants earn less than £25,000 a year.
The median gross earnings of full-time employees in the private sector were £24,970, compared to £27,686 in the public sector.
Amid mounting pressure on the next government to roll back the state and reduce the size of the public sector, the news is likely to add to concerns about the relative wealth of public servants.
Most importantly, the picture doesn't look at other benefits for civil servants such as redundancy terms and, most controversial of all, pensions.
Earlier this year, the government announced plans to cut the redundancy benefits for civil servants, ending a system which allowed workers who lost their jobs to retire on a full pension at 50 years of age..
Tessa Jowell, the civil service minister, said the reform would save the taxpayer up to £500 million over the next three years.
Under the scheme, workers would also see the maximum redundancy payout reduced from three years' salary to two years, and be forced to gain two years' service to qualify for redundancy payments.
But most discontent about the benefits to public sector workers has centred on pension contributions.
The Policy Exchange think tank pointed out last year that there is a huge gap between the pensions a civil servant can expect and what most private sector workers will accumulate.
In its worlds apart report the group said the public sector pension debt is a large burden on an already cash-strapped economy.
Last week, the Liberal Democrats said the local government pension deficit - which will have to be made up by taxpayers - will exceed £60 billion this year.

Better salary or pension which would you prefer?

macaque_2

Thrugelmir wrote: »

Better salary or pension which would you prefer?

Don't be fooled. This is pure spin and manipuation of statistics.

On a like for like basis, public servants do better than the private sector and have much better pensions.

http://business.timesonline.co.uk/tol/business/industry_sectors/public_sector/article6974029.ece

Radiantsoul

macaque wrote: »

Don't be fooled. This is pure spin and manipuation of statistics.

On a like for like basis, public servants do better than the private sector and have much better pensions.

Do you have any better statistics?

dandy-candy

I have to say I find all the civil servant bashing quite odd. My dad retired recently having spent over 40 years in the civil service as a press officer. He was moved about loads - ARC, DHSS, Customs, H&S, MOD etc (most of these have new names now) and was always on crap pay and is now on a crap pension. My brother at 23 had a basic job in a bank and was making more money than poor old dad!

sjaypink

I think civil service is better paid than private down here.

But, assuming the salaries were the same, Id choose public because of flexi time and good core working hours.

Also seems to be far less smarmy know-it-alls than in there are in private- but I guess thats just a personal observation of my local area

Don't care much about the pension issues ATM, a bit young to care, or appreciate

Davesnave

Being at the pension end of things, I feel that is a loaded question!

At the end of my four years uni/teacher training I worked for a strongly performing company for a while. After a few months, I was invited to join them in junior management.

I have a feeling that if I'd accepted that offer, I'd be much better-off now, but faced with the same choice today, I don't think it would alter.

For those who have a choice, there are usually reasons, besides salaries and pensions, for working in a particular field.

Blacksheep1979

You should also compare holidays and number of hours worked per week...

princeofpounds

I don't think people ever realise how much index linked public sector pensions are worth.

Imagine an average civil servant retiring today.

Assume a retirement income of £14k (half the median quoted in the OP).

What kind of pension pot does that represent?

Annuity rates for this person and this type of pension are about 3%. So 14000/0.03 is the implied size of the pot.

Four hundred and sixty six thousand pounds

That's the sort of figure we are giving to each and every public sector worker. It's even higher in cases of early retirement or generous plans like the police or armed services. And although some councils at least now ask for a tiny contribution to pension plans now, it's a scratch on the surface and only a recent development.

The real scandal is not that we give the large pensions, but that the program is unfunded. If we had been funding the program and saving each year then those investments could have done some of the work for us, so that the money implicitly handed over wouldn't be quite so large.

So the true cost of these promises was never borne by the taxpayers of the time. This is the previous generation effectively expanding their public services and presenting their children with the bill.

So, what is the size of this bill? Give or take £1trillion*. Not even including the poorly funded council programs. That's about 2 years of the entire public spending budget. We can fund it slowly over about 20 years, which crudely means about 10% increase in the tax rate for 20 years to pay for this at some point. And it could still grow.

When people complain about the baby boomer generation, I don't think they realise quite to what extent they have extracted wealth from other generations to benefit themselves.

*http://www.thisismoney.co.uk/pensions/article.html?in_article_id=407513&in_page_id=6

andykn

God, I hate news workers. If those figures (from an article in Citywire, I think) make little sense to you you need to read the original ONS stats:

http://www.statistics.gov.uk/pdfdir/csnr0110.pdf

"Full-time civil servants had median earnings excluding overtime or oneoff
bonuses of £22,850 in 2009, ... This figure appears lower than the Annual Survey of Hours and Earnings estimate for their counterparts in the private sector and also the wider public sector – the median gross earnings of full-time employees in the private sector were £24,970 and in the public sector as a whole £27,686"

sjaypink

princeofpounds wrote: »

Assume a retirement income of £14k (half the median quoted in the OP).

What kind of pension pot does that represent?

Annuity rates for this person and this type of pension are about 3%. So 14000/0.03 is the implied size of the pot.

Four hundred and sixty six thousand pounds

That cannot be true?

Am I really gunna be that rich????

Davesnave

princeofpounds wrote: »

.

When people complain about the baby boomer generation, I don't think they realise quite to what extent they have extracted wealth from other generations to benefit themselves.

As I would have said a year or two ago, 'that's great use of emotive language to bolster your undoubtedly well-researched argument.'

However, in most cases, the truth is a little less dramatic; most of us simply went to work and tried hard to do a good job. We then came home and made sure the mortgage was paid.

Ah, but that's boring, isn't it?