A new report from the National Audit Office has shown that public sector pension liabilities have risen by a third to almost £1.5 trillion, since 2009-10. This makes it the single largest item on the government’s balance sheet.
Commenting on the news, Tom Selby, a senior analyst at pension provider AJ Bell, said: “The NAO figures show that liabilities have continued to surge despite the previous government introducing a series of reforms designed to cut costs.”
The NAO report suggests that total liabilities equate to £55,000 per UK household, while annual payments cost the government £1,000 per household, or 1.6% of GDP. Selby added: “Given that the coalition government pledged not to revisit public sector pensions reform for 25 years, any move to pursue further reform would risk a trade union backlash of epic proportions.”
In its comments on the report, the NAO said: “The multiple and varied nature of the public sector pension arrangements creates a complex environment in which the government has different degrees of influence and control. So far, some pension schemes have reformed much further than others. As reforms to the delivery of public services continue and the scale of private sector access to public pensions potentially increases, the government will need to ensure its assurance and oversight framework is effective, and covers current and future exposure to risks across the full range of its pension commitments.”