Annal Nayyar- reports on article that – George Osborne faces another hole in his finances because early retirements and fewer staff have increased liabilities from public sector pensions

Chancellor George Osborne faces another hole in his finances because early retirements and fewer staff have increased liabilities from public sector pensions.

According to The Times today, there is now a £3bn hole emerging in spending figures because despite changes to public sector pensions for local government workers, nurses and teachers the long-term costs have continued to increase.

The local government scheme, which is funded by employer and employee contributions, is being overhauled from next April to reduce liabilities. Staff will be paying more in contributions and the final pension will no longer be dependent on final salary but career average but any shortfall still has to be met by the Treasury.

The Times quotes Office for Budget Responsibility figures saying that the forecast figure for plugging the pensions deficit in 2015/16 is £10.6bn rather than the expected £7 billion.

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