The Sun reports this morning that the cost of underwriting Teachers' pensions has risen by a quarter, from £143 to £181 billion. This is a truly astronomical rise. It can be added to the already massive liability that taxpayers face for public sector pensions in general, £1 trillion according to leading consultancy Watson Wyatt.
These financial commitments are truly alarming. With an aging population most Western countries are expecting a fiscal crunch as a smaller portion of the population will be of working, taxpaying age. Those countries that emerge with their finances intact will be the ones that start from a strong, fiscally sustainable, starting point. The damage Gordon Brown did to our private pension system combined with the building up of Private Finance Initiative debt not counted in official figures and Alan Johnson's backing down in the face of union protests over plans to reform public sector pensions have left Britain's public finances in poor shape. Britain is being left poorly prepared to deal with demographic changes that a serious government would be facing up to.