One of the points being made is that the average public sector pension is \”only\” around £7,800 a year. That may not sound much, but it is hugely expensive. If you were to try to buy the equivalent in the annuity market, you would need to have a pension fund at retirement of more than £300,000, to cover yourself and your partner, which is what the public sector payment does.
Is simply that they\’re damned expensive.
Which means that someone, somewhere, has to pay lots and lots of money to secure them.
There is no way out of this: in order to fund that £7,800 a year pension, someone, somewhere, has to cough up £300,000. It might be in savings during working years, might be employer contributions (which are really the same thing), might be taxation on others, might be foregone consumption as the capital invested spins off interest and dividends.
But in order for one peep over there to get that £300 large some group of people, somewhere in time and somewhere in the economy, have to give up that £300 large.
And that is the pension problem: they\’re expensive.