"The Local Government Pension Scheme offers retirees a regular income for life, increasing each year with inflation. According to an investigation by The Times, councils have paid almost £7bn in contributions to these pensions in the past year alone"
Telegraph: 26th December 2024: A stunning reporting exposing the fact that a quarter of all council tax revenue raised is just for funding staff retirement pots
"Nearly a quarter of all council tax raised is being used to fund staff pensions, new figures suggest.
A data analysis across more than 250 councils has found that almost £7 billion was funnelled into the Local Government Pension Scheme (LGPS) last year, just short of £1 in every £4 raised in council tax.
The figures, published by The Times, have been described as “extremely difficult to justify”. The analysis includes £141.7 million paid into pension pots by Birmingham City council, which effectively declared bankruptcy last year.
The Times based its analysis on Freedom of Information requests sent to more than 300 councils across Britain, of which 254 responded.
Those authorities reportedly paid £5 billion into their staff pensions last year, equivalent to an average 23.5 per cent of their council tax proceeds. For some councils, the proportion was more than half. From these figures, The Times extrapolated that the total sum paid into pensions across all councils was more than £6.7 billion.
Council workers are automatically enrolled into the LGPS, one of the most valuable pensions in the country. It is a defined benefit pension scheme, which guarantees an inflation-linked income for life in retirement.This type of pension is so expensive to maintain that employers have phased them out of the private sector.
Today, most private sector workers save into “defined contribution” pension schemes, which invest their savings in stocks and bonds. Unlike defined benefit schemes, it is individual employees’ responsibility to turn their savings into an income in retirement..."
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