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Public sector shift to DC schemes needed, says Hargreaves Lansdown

Hargreaves Lansdown has argued that public sector employees could still enjoy a sustainable retirement if defined benefit schemes were shifted to defined contribution model.

The firm warns that even if the Government makes no further public sector pensions promises, a child born today will still be paying for the UK’s existing liabilities until they are 77.

Hargreaves says money purchase pensions can still deliver decent retirement incomes for public sector workers, as the most important factor is not the scheme model but contribution levels.

Pensions analyst Laith Khalaf says: “Public sector workers undoubtedly deserve a decent pension, the question that needs addressing is how it is to be paid for.

“Equally, private sector workers need to recognise that we are all living longer and that the rising cost of funding a decent retirement must be met by saving hard while still in employment.”

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