It has been reported today that public sector pensions are costing UK taxpayers more than initially indicated, with the originally quoted figure of £770 billion increasing by over 50% to £1,200 billion, or £1.2 trillion. This astonishing statistic has been reported today by ThisIsMoney, with further news that the figure is not actually comprised of all public sector pensions; certain retirement funds such as those paid to local government staff are not included.

When this figure is broken down, it equates to £47,000 per household. At a time of economic difficulty, many UK workers are having to go without a pension. Fronting a massive bill for someone else’s retirement fund, whilst having to sacrifice their own, will be a difficult pill to swallow for UK private sector workers.

In March 2008, the government said the public sector bill was a massive £770 billion, but now the UK is left with a staggering number that breaks the dreaded trillion pound mark. Back in May 2009, the BBC revealed that half of UK adults were not putting aside any form of pension fund, mainly due to affordability and debt.

Dr. Ros Altman, pensions expert and former Treasury adviser, said: “We are heading for social strife when private sector workers rebel against paying other people’s pension. I’m not saying that public sector workers don’t deserve generous pensions. They do. But so does everybody else.”

This news means that the public sector pension bill will account for 80% of the UK’s total economic output in one year.

This entry was posted on Tuesday, March 23rd, 2010 at 2:14 pm and is filed under Budgeting, Retirement, Savings. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.