The rising cost of public sector pension provision, and a sustainable approach to financing it, should be clarified by each political party in what AXA believes is a key general election issue.

The call comes as Towers Watson announced that public sector pension liabilities have hit almost £1.2trn, which would more than double the new estimate of the national debt to be revealed by the Chancellor of the Exchequer's Budget on Wednesday.

Research by AXA shows that 61 per cent of voters believe the uneven playing field that lies between public and private sector pensions is unfair, and 44 per cent of public sector workers agree.

For a 25 year old woman in the private sector to receive a pension on par with her public sector counterpart, she would need to contribute almost a quarter of her annual salary every year. This estimate, calculated by AXA, is more than double the ten per cent figure that is generally assumed for private sector contributions, and around three times the eight per cent contribution level for the Government's NEST scheme.

Pensions will be an important election issue for 56 per cent of people, and 36 per cent want party leaders to address the public/private imbalance in their TV debate. Fifty-nine per cent are also concerned that they will not have sufficient funds in retirement.

"There is widespread public policy debate acknowledging that something needs to be done about the rising cost of public sector pensions, but very little detail has yet emerged on how this might be addressed," explained Paul McMahon, managing director of AXA Corporate Benefits. "AXA's research confirms that voters are looking for direction from the main political parties on what solutions they can offer to achieve sustainable funding of pensions in the public sector and, at the same time, to achieve greater equity in the pension provision people will receive when they retire."

McMahon added that the historically generous nature of public sector pension schemes has been put down to the lower salary levels, although this is no longer the case.

"Like anybody else, public sector workers deserve good pension provision; the question is one of the rising costs to the public purse. An affordable solution for the country would be for the public sector to migrate towards offering DC schemes as the private sector has already done. Provided that members begin saving early enough, and increase their contributions moderately during their lifetime, DC plan members should receive good pension benefits when they retire."

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