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The increasing cost of public service pensions to tax payers

While not something the UK government is ever likely to shout about, the revelation that the vast majority of taxpayers in UK will pay more towards the pension of public sector workers than their own (out of their council tax and the general taxation) is set to become a political battleground in the run-up to the next general election. As we have covered on the site on a number of occasions, Gordon Brown has used the public sector to shore up employment figures in the UK and the cost to the everyday UK taxpayer continues to rise year by year.

As final salary pension schemes become something of a rarity in the private sector they are still very much the norm in the public sector although estimates regarding the additional funding required are frightening to say the least. It has been revealed that if a public sector worker was to contribute (including employer contributions) 12% of their salary to their final salary scheme, after 40 years this would only fund between 20% and 24% of their total pension fund liability at retirement. As a consequence, UK taxpayers are being forced to cover the additional 76% to 80% of funding required from both council tax and traditional tax and this is growing each year.

This is actually a frightening situation and one which will impact upon each and every taxpayer in the UK during their lifetime.

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