Public sector workers retire on a pension on average three times larger their private sector counterparts, a TaxPayers’ Alliance report has revealed.
On average, a new employee aged 25 and earning the national average wage would be able to retire aged 68 on a public pension of £17,563 per year. However, the same individual would only receive £6,412 per year on a private pension.
Using these figures, a private sector worker would have to save 30 per cent of their salary (£8,606 per year) to retire with a pension as large as a public sector worker.
In 2017, government liabilities for all existing, unfunded public sector pension obligations was £1.7trn and the annual cost of public sector pensions was £38bn.
TaxPayers’ Alliance chief executive, John O’Connell, said: "Workers in the private sector are paying for their public sector counterparts to enjoy a retirement they can only dream of, and that disparity has been brutally compounded over the years by politicians continuously launching raids on private pensions.”
The disparity is highlighted further as, on average, a new private sector employee who retires at 68 would receive a pension an average of 22 per cent of their final salary, compared to 61 per cent for a new public sector worker.
O’Connell continued: "What's more, pension promises made to public sector workers are unfunded and will continue to be paid out of general taxation - that is unsustainable as people are living a lot longer than when these schemes were cooked up.”