Revealed: public and private sector pensions divide

News


30 Aug, 2018

Revealed: public and private sector pensions divide
 
Public sector workers receive a pension three times larger than those in the private sector on average, according to a Taxpayers’ Alliance report.

Typically, a new employee aged 25 and earning the national average wage would be able to stop work at 68 on a public sector pension of £17,563 annually. However, the same person in the private sector would only receive £6,412 per year.

The Taxpayers’ Alliance said the £11,000 a year gap laid bare how unjust the current pension system is for private sector workers, who end up picking up the bill for the “unfairly-generous” public sector pensions.

The organisation’s chief executive, John O’Connell, said: "Workers in the private sector are paying for their public sector counterparts to enjoy a retirement they can only dream of, and that disparity has been brutally compounded over the years by politicians continuously launching raids on private pensions.” 

The chasm is flagged up further as, on average, a new private sector employee who retires at 68 would receive a pension of 22 per cent of their final salary, compared to 61 per cent for a new public sector worker.

“What's more, pension promises made to public sector workers are unfunded and will continue to be paid out of general taxation - that is unsustainable as people are living a lot longer than when these schemes were cooked up,” O’Connell observed.