Cost of public sector pensions 'nears £1 trillion'
Discussion
A report by the Institute of economic affairs reveals that the government has understated the amount of the public sector pension liabilities.
The Government estimates the public sector pension liability to be £460bn, compared with just under £300bn in 1998. However, the IEA report, written by Neil Record, says the actual figure is £817bn - a sum far higher than the UK's national debt and about 70 per cent of the annual national income. Pension liabilities in the public sector will soar to more than £1 trillion by 2008.
The Governments only action on this issue has been to make the situation worse (through hiring 800,000 extra public sector employees most of whom have generous pension schemes), delay for 8 years and then implement a half hearted reform that raises the retirement age for new public sector employees only from 60 to 65.
Telegraph article
Cost of public sector pensions 'nears £1 trillion'
By Robert Watts (Filed: 13/11/2005)
Pension liabilities in the public sector will soar to more than £1 trillion by 2008, more than three times what they were when Labour came to power, according to a shocking new report from the Institute of Economic Affairs, the independent think tank.
The report, written by a former Bank of England economist, said government figures grossly underestimate how much taxpayers' money will be needed to pay the retirement benefits of teachers, civil servants, the police and other public sector workers.
The Government estimates the public sector pension liability to be £460bn, compared with just under £300bn in 1998. However, the IEA report, written by Neil Record, says the actual figure is £817bn - a sum far higher than the UK's national debt and about 70 per cent of the annual national income.
Record's report says the Government's pension projections fail to take proper account of rising life expectancy and public sector wage inflation. The paper also gives new insight into just how expensive public sectors pensions have become.
The report says policewomen receive retirement benefits that cost 85 per cent of their basic salary to maintain. The equivalent figure for male police officers is 75 per cent and for male and female members of the armed forces 66 and 73 per cent. The Government is engaged in tense negotiations with public sector unions over how to make the schemes more affordable.
Record said: "It is vital the true cost of public sector pensions is made transparent. Only then is it possible to have a serious discussion about alternatives. Unions need to know how valuable their pension schemes are. Perhaps their members would prefer much higher levels of basic pay for a different form of pension arrangement."
The Government estimates the public sector pension liability to be £460bn, compared with just under £300bn in 1998. However, the IEA report, written by Neil Record, says the actual figure is £817bn - a sum far higher than the UK's national debt and about 70 per cent of the annual national income. Pension liabilities in the public sector will soar to more than £1 trillion by 2008.
The Governments only action on this issue has been to make the situation worse (through hiring 800,000 extra public sector employees most of whom have generous pension schemes), delay for 8 years and then implement a half hearted reform that raises the retirement age for new public sector employees only from 60 to 65.
Telegraph article
Cost of public sector pensions 'nears £1 trillion'
By Robert Watts (Filed: 13/11/2005)
Pension liabilities in the public sector will soar to more than £1 trillion by 2008, more than three times what they were when Labour came to power, according to a shocking new report from the Institute of Economic Affairs, the independent think tank.
The report, written by a former Bank of England economist, said government figures grossly underestimate how much taxpayers' money will be needed to pay the retirement benefits of teachers, civil servants, the police and other public sector workers.
The Government estimates the public sector pension liability to be £460bn, compared with just under £300bn in 1998. However, the IEA report, written by Neil Record, says the actual figure is £817bn - a sum far higher than the UK's national debt and about 70 per cent of the annual national income.
Record's report says the Government's pension projections fail to take proper account of rising life expectancy and public sector wage inflation. The paper also gives new insight into just how expensive public sectors pensions have become.
The report says policewomen receive retirement benefits that cost 85 per cent of their basic salary to maintain. The equivalent figure for male police officers is 75 per cent and for male and female members of the armed forces 66 and 73 per cent. The Government is engaged in tense negotiations with public sector unions over how to make the schemes more affordable.
Record said: "It is vital the true cost of public sector pensions is made transparent. Only then is it possible to have a serious discussion about alternatives. Unions need to know how valuable their pension schemes are. Perhaps their members would prefer much higher levels of basic pay for a different form of pension arrangement."
What can you say really. I recently read a paper dated from 1997 that referred to the UK being the only Western Economy that was well placed to avoid massive fiscal imbalance by 2020 as our public pension deficit was only 5% of GDP.......
.....now it's 70% of GDP, nice one Gordon very
prudent.
.....now it's 70% of GDP, nice one Gordon very
prudent. Jaglover said:
What makes it even worse is that this has been combined with an assualt on private pensions.
Btw JL I qualified today, been putting myself through CIMA exams and managed to cobble together enough months of experience to meet the criteria from the past 11 years of work. You're an accountant aren't you?
timmy30 said:
What makes it even worse is that this has been combined with an assualt on private pensions.
Btw JL I qualified today, been putting myself through CIMA exams and managed to cobble together enough months of experience to meet the criteria from the past 11 years of work. You're an accountant aren't you?
Yep ACA
Well done on qualifying
Jaglover said:
What makes it even worse is that this has been combined with an assualt on private pensions.
Btw JL I qualified today, been putting myself through CIMA exams and managed to cobble together enough months of experience to meet the criteria from the past 11 years of work. You're an accountant aren't you?
Yep ACA
Well done on qualifying
Cheers mate
Good excuse to raid the cellar for a nice bottle of bubbly tonight. 
. james_j said:
...and just think how much worse it's going to get when the additional 500,000 plus people working in the public sector added since New(?) Labour came to power begin to draw their pensions. You ain't seen nuthin' yet!
500,000? Where on earth did you get that from?!! It's over 1,000,000 and still rising.
he is a card, and people reckon he's got no sense of humour!
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