Public sector pensions face government rebalancing act

Deputy Prime Minister Nick Clegg has said reform must be taken to cut the amount of taxpayers’ money currently spent on UK public  sector pensions.

Addressing an audience in central London, the Liberal Democrat Leader said: “Public sector workers deserve a decent income when they hit retirement; no one doubts that. But the current situation is not fair.

“Private sector workers have already seen final salary schemes close, while returns from defined contribution schemes fall.

“So can we really ask them to keep paying their taxes into unreformed gold-plated public sector pension pots?“

Commenting on new figures from the Office for Budget Responsibility which project public sector pensions will jump from £4billion a year in 2010/11 to £9billion a year by 2014/15, Mr Clegg said: “We cannot ignore a spending area which will more than double within five years.”

Mr Clegg went on to concede that the public spending cuts which his party pledged to delay in their own election manifesto will now have to go ahead much earlier than hoped because of unexpectedly poor economic forecasts.

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