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How did the public sector pension liability grow so large?

There are many different forecasts regarding the potential liability that UK taxpayers have towards public sector pension schemes but one thing appears certain, the liability is in the billions of pounds and will likely grow in the longer-term. We are now looking at a situation whereby local authority taxes and nationwide taxes are being used more and more to fund pension fund liabilities thereby taking away much needed funding from public services.

There is no doubt that the number of people in the UK employed by the private sector increased dramatically under the previous Labour government. It is believed that in excess of 50% of all UK household income derives from the public-sector and is therefore funded directly by UK taxpayers. It is this ever growing increase in the number of public-sector employees which has increased the pension fund liabilities on the UK government, which is obviously funded by UK taxpayers.

It is more the cumulative impact caused by an ever-growing number of public-sector employees which has seen the pension fund liability balloon. The problem is that in the eyes of many Gordon Brown made the problem and David Cameron will need to take an axe to the issue. As a consequence, like so many other issues, this could effectively make David Cameron unelectable at the next election.

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