The cost of funding UK public sector pensions has soared by more than GBP50 billion in one year, according to documents published by a newspaper.
The total cost to the taxpayer of six of the seven biggest public sector retirement schemes, including those of the armed forces, teachers and the civil service has risen to GBP327.3 billion, an 18% increase from last year. The NHS figures – the biggest pension scheme – have not yet been disclosed and could take the 12 month increase to GBP70 billion.
The figures, which include both current and retired workers, were filed at the Stationery Office and published by The Sunday Telegraph. Public sector pensions are paid for out of government revenue and taxation, rather than private sector schemes which depend on investments.
Stephen Yeo, a consultant with Watson Wyatt, said: Everyone knows that pensions are getting more expensive due to increasing longevity and lower investment returns. With private sector pensions, we read about this daily as schemes close and companies contribute more money. But in the public sector there seems to be a conspiracy of silence determined to deflect scrutiny of the true cost if at all possible.
Chancellor Gordon Brown last year backed down over plans to raise the pension age for public sector workers to realign it with the private sector.