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.

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Back in early 1999, Equitable Life went to court attempting to gain approval to enforce bonus cuts on policyholders. Equitable Life was dealt the most extreme of blows when the House of Lords upheld the decision to refuse its request; a year after it had actually won the first stage of court proceedings.

BBC had quoted the cost of losing at a whopping £1.5 billion, leaving Equitable Life in a desperate situation where sale was the only feasible option. Shortly afterwards, policyholders found out that with-profits policies would not receive any growth for seven months, new business would be stopped and the penalty for withdrawal would increase. Chaos at Equitable Life ensued, and 9 years later policyholders are still fighting tooth and nail for some kind of compensation.

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A report by pensions and insurance provider AXA indicates that the current crisis in the pensions industry is likely to worsen in the next few years.

According to the report, more than three in five UK citizens expect to rely on their state pension as their main source of income in retirement, as many businesses close their pension schemes to workers, and fewer people opt to join a private pension scheme.

According to the survey, 64% of UK residents plan to rely on their state pension for income after they are forced to give up work.

One in five 25-34 year olds believes they will able to release equity in their home to help finance them through their retirement, despite the fact that a shortage of supply and tighter lending criteria could mean many people are blocked from climbing onto the housing ladder.

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Pensioners will see their basic state pension rise by £2.40 a week next April following the publication of inflation figures later today.

Next year’s pension rise is based on the retail price index for September, which will be published by the Office of National Statistics today. Economists predict that the index will fall below last month’s figure of -1.3%, but the government has already guaranteed an increase in weekly pension payouts of no less than 2.5%. On this basis the state pension is likely to increase from £95.25 a week to £97.65. It follows an increase of 5 per cent a year earlier, up from £90.70.

Andrew Harrop, head of policy at the Age Concern and Help the Aged charity group said the rise was woefully inadequate. “Although the commitment to raise the basic state pension by at least 2.5 per cent will be a relief for older people, a £97.65-a-week pension is still not enough to ensure a decent standard of living to people who have worked hard all their lives.

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Conservative plans to raise the pension age earlier than planned will be outlined in a speech by shadow chancellor George Osborne later today.

If elected, the Tories will raise the pension age for men to 66 as early as 2016 in a bid to cut Britain’s budget deficit, instead of 2026 as planned. They have not ruled out raising the pension age for women to 66, but say that doing so by 2016 is “out of the question”.

But Labour ministers have branded the proposals “deeply unfair” on women.

Speaking on Radio 4’s Today programme, Tory leader David Cameron said that the party would conduct a review first before taking a decision on the pension age.

Cameron said that Lord Turner, who conducted the original review behind Labour’s decision to raise the pension age for men between 2024-26, recognised that his initial recommendations should have been “more ambitious” because of increased life expectancy.

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A new scheme aimed at improving company pension schemes and making them attractive to employees has been launched.

The National Association of Pension Funds (NAPF), which represents around 1,200 funds in the UK, will award a Pension Quality Mark to employers who meet a set of minimum standards, including having a minimum employer contribution rate of 6%.

The move is designed to help workers better assess the quality of their employer’s pension scheme, as well as to improve the schemes on offer and increase take-up.

In what is a tough climate for pensions, nine out of 10 companies have now replaced their final salary pension schemes to new joiners and replaced them with less generous defined contribution versions.

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The debt burden on pensioners in the UK is rising rapidly, with a third in the red because of loans and unpaid credit card bills, according to a survey by Scottish Widow.

Pensioners with outstanding non-mortgage debt owed an average of £7,344 - £612 more than those who took part in the same poll a year ago.

15% of retired people were still paying off their mortgages, with an average debt of £50,100, up from £42,100 a year ago.

The survey also found that some adults were still relying on their elderly parents for financial support, with 7% of retirees paying towards the upkeep of their grown-up children.

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Workers are making fewer requests for information about the state of their pensions, suggesting rising confidence in the pensions market, according to consultants Aon.

The number of requests by workers about the current value of their pension savings fell by 17% between the first and second quarter of the year.

However, a spokesman for risk management firm Towers Perrin said that drawing a conclusion of renewed confidence in the pensions market from these initial figures was a “huge leap”.

Aon said that the number of people asking about how much they would receive as a pension based on their current savings plan fell by 9% between April and June compared with the first quarter of 2009. However, this was still a 36% increase on the previous year.

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About half of all final-salary pension schemes will be closed to private-sector employees within the next three years, a survey suggests.

According to figures from actuarial firm Watson Wyatt, of 250 employers surveyed, 75% had closed their final-salary pension scheme to new recruits, while just 9% of schemes were closed to existing employees. However, this year has seen a sharp rise in the number of pension companies closing their pension schemes to all further contributions.

Watson Wyatt said that if its projections about the future of company pension schemes are correct, over 1 million employees currently making contributions towards a final-salary scheme will have to join an alternative pension plan by 2012.

“When employers are cutting jobs and freezing pay, pension arrangements will inevitably be put under the microscope,” said Rash Bhabra of Watson Wyatt.

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The state retirement age could rise further as Britain’s pensioners live longer, the UK pensions regulator has warned.

David Norgrove, head of the pensions regulator, said increased life expectancy meant that people in the UK may have to work until they are 70 before receiving their state pension. He added that people were “frightened” to save for the future.

“People are going to have to work longer. As a nation we are not going to save as much for retirement as we did in the past,” he said.

“The government’s recent legislation is increasing the state retirement age progressively to 68. I think it will end up higher than that,” he added.

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