Pensions 'apartheid' gap is getting wider but MORE public sector workers pick up gold-plated packages

The number of employees in company pension schemes has dropped to a record low.

But the ranks of public sector workers enjoying gold-plated packages have expanded, new figures show.

The Government's Office for National Statistics said the number of people in company plans fell by 400,000 in 2007, to 3.6million.

It is the lowest figure since records began in 1991. But there was a surge in the number of public sector workers enjoying secure, taxpayer-funded retirement packages.

The 100,000 increase took the total to 5.2million, the highest since 1991. The report underlines claims of a 'pensions apartheid' between public and private sectors.

Record numbers of corporate final salary schemes are being closed as firms try to reduce their liabilities, with workers living longer.

The switch to less secure substitutes has raised fears that millions could face comparative poverty when they retire.

Meanwhile, public sector unions have fought tooth and nail to protect their retirement schemes, arguing that they compensate workers for lower levels of pay.

Nearly all Government employees are in final salary schemes, which are exceptionally attractive because they guarantee a fixed level of income, typically around two-thirds of a worker's pay at the time of retirement.

Laith Khalaf, of financial advisers Hargreaves Lansdown, said: 'There is a two-tier system in the UK and it is becoming more and more apparent.

'As more and more people are forced to drop out of company final salary schemes, they will look over to see that their public sector cousins are still well provided for.

'Public sector unions are resisting any watering down of their benefits whatsoever. This will become a huge burden for taxpayers. Whether or not there is the political will to tackle this is a difficult question.'

Yesterday's figures were more evidence of the dramatic retreat from final salary pensions since 1997, when Gordon Brown, in his first budget, launched a £5billion annual raid on the pensions industry.

This, coupled with falling stock markets and longer lifespans across society, has made final salary schemes a luxury for most employers.

Between 2004 and 2007, the number of people in occupational pensions schemes fell by one million.

Some experts fear there will be no gold-plated private pension plans at all in a decade.

The figures do not include private plans that people take out directly from a pension company.

Tory Work and Pensions spokesman Chris Grayling said: 'These figures show the long-term damage Gordon Brown's stealth tax raid has done to the UK pensions system.

'It is little wonder that people no longer trust this Government on pensions.'

Companies will no longer be able to force out people who reach retirement age if campaigners win an appeal to the European Court of Justice.

It would give more a million older people the right to compensation if they are sacked.

Charities for the elderly have gone to the EU court after losing in the High Court.

They say scrapping compulsory retirement ages is supported by eight out of ten people who are themselves coming up to retirement.

Andrew Harrop of Age Concern said: 'We've heard from hundreds of people forced to retire against their will. It's not just unfair, it can have a devastating impact on someone's retirement income.'