Britain’s public sector pensions bill topped the UK economy for the first time in 2021, data last night from the Office of National Statistics revealed.
Pension agreements with a raft of public sector workers during the pandemic added more the £116bn to the bill and pushed its size to more than £2.3trn compared to GDP in 2021 of £2.1trn.
Forecasts for the most recent year suggest the bill might have risen since to as high as £2.5trn.
Pensions paid being paid are funded by the contributions of current employees with any shortfall met by the taxpayer with a National Audit Office in 2021 suggesting this amounted to 75% of the cost.
Laurence O’Brien, an economist at the Institute for Fiscal Studies (IFS), told the Telegraph that even though payments are spread, “symbolically, it does put into perspective that these are big, big amounts of money”.
Four big unfunded pension schemes account for the bulk of the pension liabilities - NHS, teachers, civil servants and the armed forces.