The elephant in the room

Aug 01 2005 by Brian Amble Print This Article

Private-sector workers in Britain are gradually waking up to the fact that, just as their occupational schemes are winding down, they face being forced to pay higher taxes to help pay for the generous index-linked pensions of the growing army of public sector workers.

As Liam Halligan explains in the Daily Telegraph, this issue lies, conveniently, outside the remit of Adair Turner's Pensions Commission - a three-year inquiry which reports in December.

Ömost state employees enjoy shorter hours, longer holidays and greater job security than those in the private sector. All that makes the pensions gap less justifiable.

One startling statistic is that the public sector now accounts for 18 per cent of Britain's workforce, but almost 40 per cent - and rising - of total accrued pension rights.

Meanwhile, as the government has already made clear, it is not prepared to risk confrontation with the public sector unions by raising the age of retirement in the public sector from 60 to 65.

All of which begs the question, at what point will private-sector taxpayers refuse to continue to fund these generous public-sector schemes while struggling to provide for their own retirement?

Daily Telegraph | A mammoth task facing the public sector