Jump to content
House Price Crash Forum
Sign in to follow this  

Read My Lips No Tax Rises

Recommended Posts

Surely it is now apparent to all and sundry that this Government couldn't run a bath. For Gods sake someone get them out!!!! and quick.

THE cost of the Government’s unfunded liabilities for state workers’ pensions has risen to almost £1,000 billion, nearly double the official estimate, a leading consultant claimed yesterday.

The figure represents the size of the provision the Government would have to make if it were to fund its pension obligations to public sector workers like a private company, rather than paying for them out of general tax receipts each year.

Watson Wyatt, the actuarial consultancy, estimated that the size of the pension liabilities will stand at £960 billion by the end of March, equivalent to £40,000 per household in the UK or 80 per cent of GDP.

That stands in contrast to the most recent government estimate of the burden, at £530 billion in March 2005. Watson Wyatt’s estimate suggests that the liabilities of public sector pension schemes are now roughly equal to those of the private sector.

The findings will reignite the controversy over the Government’s U-turn on raising the public sector retirement age from 60 to 65. Business leaders attacked the Government after it caved in to union pressure and agreed to exempt three million existing state employees from its plans. The Government is now locked in sector-by-sector negotiations with public sector unions to try to smooth the gap between the entitlements of current and future employees, but has made little progress so far.

Watson Wyatt used what it argues is a more appropriate method than the Government’s to calculate the total pension liability. It claims that the discount rate used on the liability should be equal to the risk-free yield on government stock, estimated at just 1 per cent, rather than 2.8 per cent now used by the Treasury.

This technical difference is enough to add an extra £190 billion to the Government’s figures.

A Treasury spokesman said: “What matters are the actual pension payments by Government, which as a percentage of GDP are exactly the same as set out a year ago. In estimating the total accrued liability of unfunded public service pensions the Government follows guidance approved by the Financial Reporting Advisory Board.”

The figures came as the Liberal Democrats announced that they would review whether the generous final salary pension schemes offered to some state workers should be replaced. David Laws, the party’s work and pensions spokesman, said he would set up a “mini-Turner commission” to examine public sector pensions, as the Pensions Commission headed by Lord Turner of Ecchinswell did not address them.


Telent, formerly Marconi, has put off plans to dispose of its £2.5 billion pension fund after failing to find a taker. The offloading, announced by the telecoms equipment maker last October, is understood to have been put on hold because of difficult market conditions and wrangling over the price.

Share this post

Link to post
Share on other sites

Love the government's impartial BBC's response.

It certainly looks like it was written by a minister!

Share this post

Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.