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Public sector pensions cost 85 per cent of GDP

The true cost of public sector pensions has been estimated at £1.2trn or 85 per cent of Britain’s GDP.

According to the British-North American Committee, the Treasury is greatly understating the cost of providing pension benefits to public sector workers.

It suggests pension costs as a percentage of GDP are three times higher in the UK than in the US or Canada. The debt is worth £20,000 for every person in Britain.

Chairman of the BNAC working group that drafted the study Neil Record says the Government must stop hiding the true cost of public sector pensions.

He says: “Governments, when challenged on the huge forward liabilities involved with public sector pensions, are all too keen to respond that these can be comfortably met from future income from taxpayers.

“The reality, however, is that the true costs of these large financial commitments are being hidden from present taxpayers and, even more worrying, are destined to predetermine the use of monies raised from future taxpayers as yet unborn.

“Inevitably, this will reduce the amounts available for the running
of public services in the future.”

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