Pay-as-you-go public sector pension schemes are affordable, sustainable and far from 'gold-plated', according to the Trades Union Congress (TUC) in its analysis of new figures published today (12 March 2010) by the National Audit Office (NAO).

The figures show that the total payments to over two million pensioners in four in the UK's four largest PAYG public sector schemes, which are unfunded, were £19.3bn in 2008/09 - an increase in real terms of 38 percent since 1999/2000.

The NAO reported that this increase has been pushed largely by more retirees each year, a far more significant driver than longevity. The taxpayer's share of these costs reduced to £14.9bn due to employee contributions of £4.4bn in 2008/09, which grew by 56 per cent in real terms since 1999/2000, attributed to an increase in staff numbers and contribution rates.

Going forward, the NAO report states that over the next 50 years, total payments are expected to rise to over £79bn per year by 2059/60, according to projections from the Government Actuary's Department (before allowing for employee contribution income).

However, as a proportion of GDP, projected payments are expected to hit 1.9 per cent of GDP between 2018/19 and 2033/34, and then fall to 1.7 per cent by 2059/60. Over the last decade, a rise from around 1.5 per cent up to 1.7 per cent was experienced.

The NAO will publish a second report later this year examining the impact of recent changes on the overall cost of the UK public service pay-as-you-go pension schemes.

The TUC said the report shows that the vast majority of pensions in payment are 'modest', and notes figures regarding NHS and civil service pensions. Fewer than 0.2 per cent of teacher, 1.8 per cent of civil service and 2.5 per cent of NHS pensioners receive pensions of more than £40,000.

TUC general secretary, Brendan Barber, said: "The populist campaigns against public sector pensions come either from employer groups who want to distract from their own pensions disappearing trick, or right-wing pressure groups who are deeply hostile to public services," he claimed.

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