07 March 2018

UK pensions liabilities rise by £1 trillion in five years - comment from Steve Webb, Royal London

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Steve Webb - Director of Policy

Steve Webb

Director of Policy, Royal London

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The Office for National Statistics has published estimates of the total pension liabilities of the United Kingdom – state pensions, public sector pensions, company pensions and private pensions. Between 2010 and 2015, the total liability rose by just over one TRILLION pounds, to £7.6 trillion. 

Out of this £7.6 trillion total in pension promises, only about a third of that is money ‘in the bank’ (ie sitting in company pension funds etc.). The rest of it is promises which today’s working age population are hoping tomorrow’s workers will keep.

Key figures from the report are:

  • UK pension liabilities rise by just over £1 trillion over five years (nominal increase) - £6.6 trn to £7.6 trn;
    • Government bill £5.3 trillion (up from £5.0 trillion):
      • Decrease from 243% of GDP to 213%;
      • state pensions £4.0 trillion 
      • unfunded public sector (teachers, nurses, civil service etc) £0.9 trillion 
      • Local Government Pension Scheme £0.3 trillion;
  • Occupational pensions £2.3 trillion (up from £1.6 trillion);
    • Increase from 102% of GDP to 124%;
    • £2 trillion funded DB; (up from £1.4 trillion); 
    • £0.1 trillion annuities; 
    • £0.2 trillion trust based DC;
  • Individual [not included in grand totals]
    • £0.3 trillion in individual personal pensions
    • £0.15 trillion in annuities from personal pensions


Commenting, Steve Webb, Director of Policy at Royal London said:

"The numbers in this report are truly mind-boggling. Today’s population has built up £7.6 trillion in pension promises but has only set aside about a third of that amount to pay for them. The rest will have to be financed by tomorrow’s workers. If we are to have a meaningful debate about how we pay for an ageing population and about fairness between generations, figures like these need to be published on a regular basis and should inform policy-making."

- ENDS -

For further information please contact:

Steve Webb, Director of Policy, Royal London

About Royal London:

Royal London is the largest mutual life, pensions and investment company in the UK, with funds under management of £117 billion, 8.8 million policies in force and 3,745 employees. Figures quoted are as at 30 June 2018.