Public sector pensions 'still more valuable'

Thu 16 Oct 2008

Public sector pensions are still more valuable than those offered in the private sector.

Research by the Pensions Policy Institute (PPI) has revealed recent reforms have done little to reduce public employees' payouts.

"The government's reforms have reduced the average value of public
sector pension schemes by around three per cent, from 24 per cent to 21 per cent of salary," said director Niki Cleal.

Even after these reforms "there are still significant differences between pensions in the public and private sectors", she added.

The PPI study found the average public sector contribution was £4,000 a year, far in excess of the £1,600 made by a similar private sector employer.

Ms Cleal also noted that in the private sector "two-thirds of employers have closed their defined benefit schemes and many now offer less valuable, defined contribution pensions".

The Office for National Statistics recently revealed that for the first time, there are now more pensioners in the UK, than children aged under 16.

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