A new study published today by the IEA puts the burden of future public sector pensions at £817bn. This estimate is much greater than Britains current national debt and is equal to nearly 70% of one years national income.
The author, Neil Record forecasts that the Governments own estimates for the pension liabilities will increase to £510bn later this year, but that these estimates will be far too optimistic because they do not take proper account of trends in mortality, likely future public sector pay increases and market interest rates. The author demonstrates how his estimates can be reconciled with the Governments estimates and shows how, if the Government continues to make unrealistic assumptions, reality will catch up leading to bigger increases in the governments own figures for the public sector pensions liability in coming years.
The author also calculates