Public Pensions Worth Triple Private Sector Funds

Public sector retirement savers have pension pots triple the size of most private workers, according to the latest official figures.

The research by the Office of National Statistics (ONS) reveals a two-speed pension society where public sector workers are way ahead of the rest.

Workers with a public sector pension had an average £61,600 in savings between July 2012 and June 2014, says the ONS.

Private workers averaged £24,000 in their pensions during the same period.

The figures also showed that Britain’s 5.4 million public sector workers are twice as likely to have pension savings than the nation’s 23.5 million private sector workers.

Gold-plated final salary schemes

To tip the balance even further, 84% of public sector workers have a final salary scheme linked to earnings before retirement.

The ONS explained 42% of private sector workers had pensions, but most are defined contribution schemes linked to the performance of the stock market.

Many pension experts argue the balance of savings for retirement between private and public sector workers is unfair.

One former campaigner now pension minister Ros Altmann had described the imbalance as ‘pension apartheid’ in the past.

The pension gap between private and public workers is also growing at a fast pace.

In the previous ONS pension survey for the time between July 2010 and June 2012, the pension wealth of public sector workers grew an average £20,000 from £41,800 to £61,600.

Unfair on taxpayers

For private workers, their average pensions increased just £300 in the same period.

The figures also showed a pension gulf between men and women.

By retirement, men have an average pension fund of £162,400, while women have £73,900.

One pension expert, Jonathan Isaby, chief executive of the TaxPayers’ Alliance, said: “Public sector workers traditionally had a more generous pension because they earned less than the private sector, but this is no longer correct.

“It’s not fair private workers cannot afford to save but have to subsidise wealthier public sector retirees from their wages.”

The ONS report looks at pension wealth in the UK and also found that one in four households have no pension savings.

The 10% of households with the biggest pensions held 47% of all wealth held in pensions, while 50% of those with the lowest amount of retirement savings held 8% of total pension wealth.