Workers' pension divide is exposed

My Account
Logout

Create an Evening Standard Account

Use your social network

Save time by using your existing account to sign in to Evening Standard

We'll never share your information or post anything to your account without your permission

Welcome! Sign in here

Use your social network

Save time by using your existing account to sign in to Evening Standard

We'll never share your information or post anything to your account without your permission

Forgot your password ?

Registration

* indicates fields that are mandatory

Email *

Password *

Confirm Password *

First name *

Surname *

Postcode *

Country *

Mobile phone number

Username *

Gender *

Year of birth *

When you sign up...

You will have access to all our online competitions, discounted offers and can post comments on our site.

You will also receive The Weekender newsletter sent every Thursday - it’s full of fantastic offers and ideas for the weekend. You can update your email preferences in your account page when you log in.

Other newsletters and emails

Homes & Property Newsletter - Yes I want to receive the weekly email with all the latest news on property in the capital

Occasionally we would also like to send you relevant emails detailing specific offers either from ourselves or carefully selected partners. If you would prefer not to receive these then please tick the appropriate boxes below. We will never pass on your details.

I do not want to receive additional offers and information from the Evening Standard

I do not want to receive additional offers and information sent by Evening Standard on behalf of carefully selected partners

Terms and Conditions

* I have read, understood and agree to be bound by the terms and conditions of Evening Standard

Registration

Mail Sent for Registration Confirmation.

A confirmation email has been sent. Please activate your account by clicking on the activation link sent in your mail box.

Employers would have to contribute up to 35% of a salary into workers' pension schemes to match a public sector pension, PricewaterhouseCoopers said.

Civil servants and NHS staff could be reluctant to move jobs because of the generosity of pensions for workers in the fields, the accountancy firm suggested.

John Hawksworth, head of macroeconomics at PricewaterhouseCoopers, said: "There are implications here for both public and private sector employers.

"A generous final salary pension is a great draw to talent for a career in public service, but it also has drawbacks in limiting the flow of people between the public and private sectors.

"People with long civil service careers may be very reluctant to leave the scheme, especially now that it is rare to find anything comparable in the private sector.

"This not only creates potential distortions in the labour market but will also impose a rising burden on the taxpayer in future years as the relatively large baby boom generation of civil servants is now beginning to retire."

PricewaterhouseCoopers compared the fortunes of a state employee from the age of 21 to retirement with someone on the same pay in the private sector.

The public sector worker came out with a pension of £28,900 compared with just £11,600 for the private sector employee.

Raj Mody, a pension specialist from the accountancy firm, said: "The factors that make current pension commitments fundamentally intolerable for many public or private sector organisations are essentially similar. But there is far greater urgency for private sector companies to address problems because of greater transparency of costs and also clear accountability to shareholders."