Public sector pension liability exceeds £ 2bn for the first time after rising 16% in one year and is greater than national debt with fears of unsustainable costs
- Government Accounts Show Public Sector Pension Liabilities Exceeding £ 2bn
- Liabilities soared 16 percent in 2019-20 and were higher than the debt mountain
- Activists warned of a “ton of attention” for the huge costs of getting to the runway
By James Tapsfield, political editor of Mailonline
Posted: 11:42, June 8, 2022 | Updated: 11:42, June 8, 2022
Public sector pension liability has been revealed to have soared above £ 2 trillion for the first time and is greater than the national debt.
Government accounts show that liabilities for retirement payments, not including the state pension, rose 16 percent year-on-year.
The figure reached £ 2.2 trillion at the end of 2019-20, the most recent fiscal year for all government accounts released this week.
This was significantly above the level of 1.8 billion pounds of debt mountain at the same time.
Activists warned that the scale of the figures should be an “alarm clock” on the huge costs that will be incurred.
Prospective taxpayers will have to meet them to honor the important pension agreements that are still being offered to public sector workers, such as parliamentarians, judges, civil servants and NHS doctors.
Government accounts show that liabilities for public sector retirement payments, not including the state pension, rose 16% year-on-year.
Most of the liabilities come from the pension plans of the NHS, teachers, the civil service and the Armed Forces
State employees still have access to pension plans with payments tied to their wages and indexed to inflation, even though almost all private sector companies abandoned the agreements when they became too expensive.
Public sector pension liabilities of £ 2.2 trillion account for around 44 per cent of total government liabilities in 2019-20. It rose from £ 1.89 trillion the previous year.
The accounts pointed to a change in the assumptions used to calculate the value of public sector pensions, such as life expectancy and the difference between investment returns and inflation.
Most of the liabilities come from the pension plans of the NHS, teachers, civil servants and the Armed Forces, which have millions of members.
All four are unfunded, meaning that instead of going to their own pensions, the contributions of current workers are used to help the taxpayer pay those who have already retired.
The NHS scheme increased its liabilities by £ 140 billion to £ 760 billion.
The teachers ’pension plan saw an increase from £ 79.4 billion to £ 490 billion. The Cabinet Office scheme represents £ 308.6 billion of the total and the Armed Forces £ 233 billion.
The local government pension plan has a liability of £ 105.7 billion.
Danielle Boxall, campaign director for the TaxPayers’ Alliance media, noted that pension liabilities have more than doubled since the Conservatives came to power in 2010.
“Those in the public sector have pensions that private sector workers could only dream of,” he said.
“These numbers are a wake-up call to the magnitude of the financial challenge we face, not just today, but for years to come.
“The government should stop pushing the can and make sure new public sector pensions are adequately funded to protect future generations from paying the bill.”
This graph of the General Accounts of the Generalitat shows how the different schemes contribute to the public sector pension liabilities