The takeback demands of the rail bosses are part of a broader offensive by the employers and their government against workers’ pensions across the United Kingdom.

Final salary pensions—or pensions equivalent to workers’ wages at the end of their employment—have been a target of bosses here the last couple of years. The Confederation of British Industry (CBI) reports that in this period 41 percent of firms have switched from final salary pensions to what’s called “money purchase schemes.” Under these schemes workers’ pensions are dependant on how the funds were invested, how much the worker and their employer agreed to pay into the scheme, and the interest rates at the time of retirement.

Employers have convinced workers to opt for these schemes in part because of the paltry nature of the state pension. Currently available to workers retiring at 65, the level of state pension for individuals is £79.60 per week and £127.25 for couples (£1=$1.50).

This comes out to an average annual pension of £4,081 ($6,120)—rising to £5,438 ($8,157) for those who are eligible for an earnings-related bonus.

Some workers don’t even get that much. They become eligible to receive full state pension only if they have paid into the compulsory government national insurance scheme for most of their working lives. Women who have taken time out of work get little or no state pension. On average, women’s retirement income from all sources is 53 percent of men’s.

Moreover, the National Pensioners Convention reports that the government plans to reduce state pension funds by a further 20 percent by the year 2050.

In the 1990s the government offered incentives in the form of special rebates to workers to push them to opt out of the state pension and invest in pension plans pegged to investment schemes. An estimated 15 million workers had “contracted out” by 2001. Today the total amounts to 62 per cent of out of the workforce. Many are discovering that they will receive a pension even lower than the guaranteed state plan.

The CBI is now pushing for a compulsory retirement age of 70 to reduce pension payouts still further. Government ministers claim that workers will still be eligible for retirement at 65 and that raising the retirement age will help to combat “age discrimination.” According to statistics from the Trades Union Congress, if the retirement age is extended to 70, only one in five people, and nearly one third of the male population, will have died before they are eligible for retirement.

Behind the government and employer attack on pensions is the creeping crisis of British capitalism. The Labour government has no intention of paying a living state pension and private companies cry poverty to justify cuts in retirement benefits.  
 
 
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