Taxpayers 'to shoulder burden of £1.2tr public sector pensions cost'

Date: 29th June 2009

The cost of public sector pensions has grown to £1.2 trillion, new analysis by the British-North American Committee has revealed.

According to a newly-published paper from the think tank, which is made up of a number of leading academics and business leaders, public sector pensions costs in the UK are around three times higher than in the US or Canada.

The report concludes that the total cost of pensions for the sector's workers has now grown to around 85 per cent of the UK's GDP, or equal to £20,000 per person, with an increasing burden to be placed on the taxpayer in order to meet such responsibilities.

Former Bank of England economist and one of the report's authors, Neil Record, commented: "Neither politicians, the Treasury, nor employees know what public pensions cost - or are worth - each year [or] what the total future taxpayers? pension liability is."

He added that greater transparency is needed rather than allowing the government to hide behind "actuarial assumptions that are designed to push costs out into the future".

Around one in four British workers are currently employed by the public sector.