The staggering cost of the UK's public sector pension promises has escalated dramatically, with new analysis showing the burden now exceeds £200,000 for every household in the country.
A Trillion-Pound Time Bomb
Projections from former Bank of England economist Neil Record reveal that state workers have accrued a colossal £5.8 trillion in inflation-linked retirement benefits. This marks a sharp increase from the £4.9 trillion estimated for the 2023-24 period. The analysis calculates that this has pushed the implied debt to £203,000 per UK household, up from £173,000 just one year ago.
Mr Record issued a stark warning, stating the taxpayers' burden was now "out of control". He criticised the government for allowing a "privileged pension elite" within the public sector to mortgage the future of taxpayers, who face both higher taxation and the prospect of funding pensions they themselves are unlikely to ever receive.
An "Intergenerational Betrayal"
The analysis has ignited fierce debate about intergenerational fairness. Angus Hanton, co-founder of the Intergenerational Foundation, labelled the accumulating commitment a "betrayal of younger people".
He pointed out that the private sector has largely abandoned generous defined benefit pension schemes because they are deemed unaffordable. "There’s no excuse for continuing to expose taxpayers to the risks that the private sector decided it was unreasonable to adopt," Mr Hanton said.
He further suggested that the system is compromised because civil servants and senior politicians are themselves beneficiaries of these schemes, arguing an independent body would likely design less generous terms.
Government Disputes the Figures
In response to the analysis, a Treasury spokesman contested the headline figure. "We do not recognise this figure. It is inaccurate to suggest that unfunded Public Service Pension Schemes are unaffordable," the spokesman stated.
The Treasury pointed to the latest Whole of Government Accounts, which estimate public service pension liabilities at £1.3 trillion. This official figure represents the discounted present value of future payments, using different accounting methodology to the forward-looking projections highlighted by critics.
Despite the government's rebuttal, the soaring estimates have placed the long-term sustainability and fairness of the UK's public sector pension system firmly under the spotlight, raising urgent questions about who will ultimately foot the bill.
