MoneyWeek: Britain's widening pensions gap

Private-sector pensions are shrinking and vanishing, yet public-sector ones are more generous than ever. Why the gap? And is it sustainable? Tim Bennett reports.

What's the latest news on pensions?

"We have got to end the apartheid," said Conservative leader David Cameron last week as he highlighted the huge gulf between public and private-sector pensions. Quite so, says The Daily Telegraph's Paul Farrow: "the pension playing field is decidedly lopsided". The Taxpayers' Alliance recently revealed that 17,150 public-sector workers have already retired with pension pots worth over £1m. The list of beneficiaries includes 10,500 ex-NHS employees, 3,680 civil servants, 1,800 teachers and 815 judges. Ignoring those at the top, even the average public-sector worker will retire on an annual pension of £17,091, says Dr Ros Altmann, a former adviser to Tony Blair. To match that, given that 80% of employers have closed their final-salary schemes, a private-sector worker would have to save £427,275. In reality, says the Association of British Insurers, the average lump sum used to buy an annuity is just £24,150, enough for an annual income of well below £2,000...

The rest of this article can be found in Money Week magazine.