Public sector pension pots 3 times the size of private ones

And the gap is continuing to grow

PUBLIC sector workers have nearly three times as much in their pension pots as staff in the private sector.

Official figures published yesterday laid bare the full scale of Britain’s growing ‘pensions apartheid’.

It prompted a campaign group to insist taxpayers should no longer be ‘subsidising final salary million-pound retirement benefits for the public sector elite.’

Public sector workers had the equivalent of £61,600 in their pension pots between July 2012 and June 2014, according to the Office for National Statistics. This compared to just £24,000 for private sector workers, many of whom have never bothered to prepare for their retirement.

Britain’s 5.4million public sector workers are twice as likely to have a pension as their counterparts in the private sector, with 84 per cent of them enjoying a final salary scheme.

In contrast, just 42 per cent of the 25.3million people working in the private sector had a work pension over the same two-year period. The vast majority of them have less generous ‘defined contribution’ pensions which are linked to the stockmarket and can rise and fall in value.

Most companies have shut down their final salary schemes which pay a guaranteed income based on length of service and salary at retirement. They have become increasingly unaffordable as people live longer. But state workers – including nurses, soldiers and teachers – continue to enjoy final salary pensions which are funded by the taxpayer.

The inequality has been a sore point for years among campaigners, with pensions minister Baroness Ros Altmann previously describing it as the UK’s ‘pensions apartheid’. The Daily Mail has exposed how dozens of NHS chiefs have pension pots worth more than £1million.

But the gulf between them and private sector workers is widening rapidly, according to the ONS.

The pensions wealth of public sector workers has soared by almost £20,000 – from £41,800 between July 2010 to June 2012, to £ 61,600 between July 2012 and June 2014.

Over the same period, the pensions wealth of private sector workers has gone up by just £300 from £23,700 to £24,000. This is because the value of public sector final salary pensions rises rapidly each year. Private sector workers in stockmarket-linked pensions receive far less generous contributions from their employers.

Millions of savers also saw the value of their pension pot plunge during the recession.

The sense of injustice has been compounded by the fact that average wages in the public sector have overtaken average earnings in the private sector since the recession.

Jonathan Isaby, chief executive of the Tax-Payers’ Alliance, said: ‘It’s not right for taxpayers to be subsidising final salary million-pound retirement benefits for the public sector elite while seeing little growth in their own pensions or in many cases not having a pension at all.’

He added: ‘ Generous public sector pensions were supposed to correct for lower pay than private sector jobs but that’s no longer the case either and the Government must ensure the costs for these deals do not spiral even further out of control.’

The ONS figures also revealed pensions inequality is not restricted to public and private sector workers. There is also a gulf between men and women. Men have an average of £162,400 in their pension pot by the time they retire, compared with just £73,900 for women.

‘Sense of injustice is compounded’