Public sector pensions could cost up to

Michael Johnson’s report, “A Toxic Tangle”, was featured on the front page of The Telegraph on Monday 4th February.

To view the full article, please visit The Telegraph website

“Experts from the Centre for Policy Studies claim to have found a new £9 billion-a-year “pensions black hole” that will have to be footed by taxpayer by the beginning of the 2020s.

Its new study says the Government expects the burden on taxpayers to be around £1,230 per household but it could actually be more like £1,600.

The new CPS study lays the blame on unintended “expensive consequences” caused by the introduction of the new flat-rate £144 per week pension at the same time as reforms to reduce the costs of public sector pensions.

It also says Lord Hutton, the architect of the current public sector pension reforms, may have misjudged the costs by using life expectancy figures that are “now six years out of date”. The public sector pension reforms are meant to stop the cost of public sector pensions soaring to unsustainable levels by bringing them into line with private sector deals. As a result, most public sector workers will have to work longer and have lower pensions than they were expecting, which sparked a series of protests and strikes.

However, Michael Johnson, a pensions expert and research fellow at the CPS, claims the reforms will not do enough to get the cost of public sector pensions under control, as the Government has seriously misjudged the impact of its reforms.”

To view the full article, please visit The Telegraph website

Date Added: Monday 4th February 2013