Public sector deficit underestimated by 80%

Four large schemes make up the bulk of the deficit, with unfunded pension schemes belonging to teachers, the NHS, the civil service and armed forces accounting for 77% of the estimated liability last year. According to Watson Wyatt, the most recent official estimate of the public sector pension liability of £530bn as of March 2005, was revealed in the House of Commons last week by Des Browne, the chief secretary to the Treasury. But Stephen Yeo, a senior consultant at Watson Wyatt, claims this is a “significant underestimate because it doesn’t take account of falls in long-term interest...