"This demonstrates that these schemes are the most sustainable element of age-related spending and partially offset projected increases in the cost of health and social care expenditure," said Prospect pensions officer Neil Walsh.
The OBR’s figures show that gross public service pension payments are projected to fall from 2 per cent of GDP in 2015-16 to 1.4 per cent in 2060-61 (paragraph 31).
The OBR says that these costs are falling due to:
- the ‘cap and share’ reforms agreed by public sector workers to limit the cost of improvements in longevity to taxpayers
- the decision to switch pension increases from RPI to CPI
- the pay freeze and planned public sector job reductions.
“Far from adding to ministers’ arguments that further reform is necessary these projections totally undermine the case the government has been making to date.”
The OBR report is at http://budgetresponsibility.independent.gov.uk/wordpress/docs/FSR2011.pdf