Public finances are likely to come under pressure into the next Parliament and beyond as Britain struggles to deal with the cost of social care for its an ageing population, the Office for Budget Responsibility (OBR) has said.
The net present value of future public sector pension liabilities arising from past employment was £1.13trn or 78.7% of GDP at the end of March 2010, according to the OBR's first Fiscal Sustainability Report. This was £331bn higher than a year earlier, though almost £260bn reflected a fall in the real yield on high-quality corporate bonds, which fell over the year. But the OBR has warned the government which succeeds the coalition in 2016 will be forced to stretch stagnant revenues across greater future demand for spending on age-related items such as pensions and healthcare, With...
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