Gov't underprojects pensions cost, says PPI

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New demographic projections have shot a hole through previous government forecasts as to the amount of GDP pensions costs will equal, says the Pensions Policy Institute.

The new figures suggest previous government estimates were out by up to 20%, implying spending on pension benefits and contracted-out rebates by 2052 will hit 6.3% of GDP rather than 5.2%. Disability benefit, council tax benefit, and housing benefit are projected to cost broadly the same by that year, or about 1.1% of GDP. ”Most of the difference between the projections is in estimates of spending on basic state pension, with costs increasing by 0.6% of GDP in response to the higher estimate of the number of people over state pension age,” the PPI says. By contrast, the forecast co...

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