By Lucy Phillips
12 March 2010
Taxpayer-funded pension payouts for retired teachers, civil servants, health workers and members of the armed forces are set to top £79bn a year within 50 years, the National Audit Office has warned.
Public Accounts Committee chair Edward Leigh described the forecast as ‘frightening’, although he acknowledged it did not represent an increase in the proportion of gross domestic product from current levels.
The figure was disclosed in a March 12 NAO report on the cost of unfunded public service pension schemes. This revealed £19.3bn was paid out in 2008/09 to the 2 million pensioners in the four largest schemes (teachers, civil servants, NHS workers and members of the armed forces). This represented a ten-year increase of 38%, mainly driven by increasing numbers retiring. While state employees paid £4.4bn of the costs, the taxpayer picked up the remaining £14.9bn.
The report also examined estimates of payouts across all public sector unfunded schemes up to 2059/60. It criticised the Treasury for basing its forecasts on the unlikely scenario of there being no growth in the public sector workforce.
‘It is striking that the Treasury’s projections all depend on the heroic-looking assumption that, as the UK’s workforce rises and the demand on public services increases, the size of the public sector workforce will stay the same,’ said Leigh.
12 March 2010
Taxpayer-funded pension payouts for retired teachers, civil servants, health workers and members of the armed forces are set to top £79bn a year within 50 years, the National Audit Office has warned.
Public Accounts Committee chair Edward Leigh described the forecast as ‘frightening’, although he acknowledged it did not represent an increase in the proportion of gross domestic product from current levels.
The figure was disclosed in a March 12 NAO report on the cost of unfunded public service pension schemes. This revealed £19.3bn was paid out in 2008/09 to the 2 million pensioners in the four largest schemes (teachers, civil servants, NHS workers and members of the armed forces). This represented a ten-year increase of 38%, mainly driven by increasing numbers retiring. While state employees paid £4.4bn of the costs, the taxpayer picked up the remaining £14.9bn.
The report also examined estimates of payouts across all public sector unfunded schemes up to 2059/60. It criticised the Treasury for basing its forecasts on the unlikely scenario of there being no growth in the public sector workforce.
‘It is striking that the Treasury’s projections all depend on the heroic-looking assumption that, as the UK’s workforce rises and the demand on public services increases, the size of the public sector workforce will stay the same,’ said Leigh.
