Households face £1,230 bill to plug public sector pension black hole (The Telegraph)

Households face an annual bill of £1,230 by 2017 to plug the “unsustainable” black hole in public sector pensions as Coalition reforms still leave the taxpayer paying for £4 in every £5 of the pensions, a thinktank has warned.

To read the full article, visit The Daily Telegraph webpage.

The Centre for Policy Studies (CPS) said that the cashflow shortfall in public sector pensions will be around £32 billion in 2017, meaning that each of Britain’s 26 million households will have to pay £1,230 to fill the gap.

This compares with an annual bill of £850 per household currently. As recently as 2006, each household was paying just £486 annually to plug the public sector pensions black hole, the CPS said.

The cashflow shortfall is the difference between pension contributions by the UK’s public sector workers and the amount being paid out to people who have retired.

Michael Johnson, who wrote the CPS’s report ‘The approaching cashflow crunch’, said that the rising shortfall is “unsustainable”. He said that over the next few years “furiously ringing alarm bells” about the cash gap will become “impossible to ignore”.

The rising cost of paying for public sector pensions comes despite Coalition efforts to deal with the rising cost.

To read the full article, visit The Daily Telegraph webpage.

Read the full report ‘The Approaching Cashflow Crunch’.

Date Added: Monday 5th November 2012