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PPI report highlights pensions gap

Public sector pensions remain far more generous than their private sector equivalents, new analysis has shown.The Pensions Policy Institute (PPI) said that the typical private sector pension pot is equivalent to 21 per cent of salary.It added that, while defined benefit private sector schemes averaged 20 per cent of salary, the more commonly-found defined contribution plans came to just seven per cent.The government has introduced measures over recent years in an attempt to close this gap, notably raising the pension retirement age for public sector workers to 65.Niki Cleal, director of the PPI, commented: "Even after the government's reforms, there are still significant differences between pensions in the public and private sectors."The majority of public sector employees have a defined benefit pension linked to their final salary. In the private sector two-thirds of employers have closed their defined benefit schemes and many now offer less valuable, defined contribution pensions."

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