Final salary pensions now 'extinct' for private sector workers - as state staff enjoy 'gold-plated' deals

Increasing life expectancy, spiralling costs and plunging stockmarkets have forced thousands of employers to close these schemes in the last year.

The figures highlight the widening divide between private and public sector workers who enjoy 'gold-plated' pensions funded by the taxpayer.

Pensions divide: Paying for public sector pensions could leave private sector workers short in their own retirement

A separate report by the Office for National Statistics showed the number of public workers in final salary schemes has ballooned to an astonishing 5.2million – the highest level since 1991.

Findings by Aon Consulting revealed that in the last year the number of private sector schemes open to new members dropped from 27 per cent to a record low of 17 per cent.

The figures came as financial experts warned that private sector workers will soon pay more into the pensions of civil servants than their own.

An analysis found that private workers contribute 91p towards the retirement of town hall staff for every £1 they invest for themselves.

This figure, however, is expected to rise as unions sew up deals to safeguard the 'gold-plated' retirement deals.

It would take the average private sector worker on a salary of £25,000, 46 years to get a pension of £10,000 a year. A public sector worker could achieve this in 24 years.

Dr Ros Altmann, a leading pensions consultant, said: 'There is a pensions aristocracy. Public workers are paid more and earn more in pensions, which are paid for by the taxpayer.

'I don't think workers realise the value of these pensions or the burden this will have on future taxpayers at a time when pensions prospects have declined significantly.'

Final salary pensions give a guaranteed annual income based on the number of years an employee has worked for a firm and their final salary when they retire.

The longer they live, the more the scheme has to pay out.

Many companies have switched to defined contribution schemes which are cheaper to run because the amount they pay out is based on the size of the employee's pension pot and the growth of the stockmarket.

In 2007-08 alone £29billion of pension promises were made to public sector workers.

However, they contributed only £19billion towards this.

Matthew Elliott, of the TaxPayers' Alliance, said: 'It's unfair for private sector workers to be forced to pay more into public sector pensions than they can afford to save for their own retirement.

'The gold-plated pensions enjoyed by the public sector are outdated and totally unaffordable.'

Pensions experts have accused the Government of underestimating the scale of the problem.

The Institute of Economic Affairs has warned that the liabilities – the amount that would be needed if all public sector pensions were paid out today – will soar in coming years to between £1,100billion and £1,200billion by 2010.

As shown by the table here, MPs fare particularly well when it comes to pensions, even though they have to contribute 9.5 per cent of their salary into their schemes.