Total pension liabilities of the UK rose by just over £1trn, to £7.6trn, between 2010 and 2015, latest figures published by the ONS have shown.
Out of this £7.6trn total in pension promises, just a third of that money is ‘in the bank’ (ie sitting in company pension funds etc.).
A total of £5.3trn of these pension liabilities is the responsibility of the government (including £4trn in state pensions).
Of the remainder, £2trn is held in private sector defined benefit (eg final salary) pension plans, with only £240bn in workplace defined contribution plans.
Individual personal pensions hold £302bn meaning in 2015 they outstripped the amount held in similar workplace defined contribution pensions by 25%.
Royal London director of policy Steve Webb said: "The numbers in this report are truly mind-boggling. Today’s population has built up £7.6trn 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."
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