Teachers vote in favour of strike
April 2, 2008
Up to 200,000 teachers look set to hold a one day walkout on April 24th in response to the below-inflation pay rise proposed by the Government. A ballot was held in line with legislative requirements relating to industrial action, with a 32% turnout for the vote. The result of the ballot was 75% in favour of a strike. It is 21 years since the National Union of Teachers (NUT) last held a strike.
The proposed pay increase is 2.45%, which is higher than other public sector increases and higher than the 2% cap on public sector increases that was called for by Prime Minister Gordon Brown. The argument over inflationary increases relates to the different indexes that inflation can be measured against. The 2% cap is based on the Consumer Price Index (CPI) which is 2.1%, but the Retail Price Index (RPI) is much higher at 4.1%. The RPI includes ‘cost of living’ factors such as housing costs and mortgage rates, so arguably it more realistically reflects the type of salary increase required to be able to sustain the same standard of living. Unsurprisingly, the NUT is arguing that the proposed 2.45% represents a cut in the standard of living for teachers.
The NUT is concerned that poor conditions within the sector will lead to problems recruiting and retaining teachers, causing shortages and generally affecting morale. Since there have been regular news items about the issues of bringing more Newly Qualified Teachers (NQTs) into the profession, and large numbers leaving after a short period, further problems in attracting and keeping quality teachers cannot be a good thing. Just recently I read an article that reported that teaching unions have asked the Government to commit to reducing class sizes to just 20 pupils by 2020. How will this be achievable if not enough new teachers are entering the profession due to poor terms and conditions and bad press such as this industrial action? It all seems like a bit of a mess to me.
Workers use their money for now rather than save for the future
April 1, 2008
A UK Stockbroker, Brewin Dolphin, has released findings from research which claims that one in ten workers will cut their pensions contributions in the next year to enable them to pay for rising mortgage fees and credit card debts. As the economic situation in the UK looks increasingly unpromising, the firm estimates that 2.4 million people will either stop or reduce their pension payments as they feel the pinch from interest rates, increasing credit debt and fewer borrowing opportunities. The most likely age group to stop their contributions will be 25 to 34 year olds. However, it is warned that even a short break in pension contributions could have detrimental effects on a person’s income in retirement. What is important to remember is that many occupational pension schemes include an employer contribution that will be lost if you stop your own contributions, and it is worth considering all available options before reducing or stopping this payment. Many employers provide an employee assistance programme which will normally include a debt advice line. If your company does have this sort of scheme, then use it before taking any extreme action in relation to your pension savings.