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Page last updated at 07:06 GMT, Wednesday, 29 June 2011 08:06 UK

Are public sector pensions affordable?


The government has described upcoming strikes over pension changes as "regrettable, unnecessary and premature", insisting that, following Lord Hutton's landmark report, the current system is not affordable.

But the Institute of Fiscal Studies has questioned that analysis, with the organisation's Carl Emmerson stating that "affordability is not a very good argument for making these schemes [public sector pensions] less generous".

With a gradual decline in the proportion of the national budget spent on public pensions predicted over the long-term, he said, "if we want to afford them we can".

But Treasury minister Justine Greening argued that Lord Hutton's report found that "public sector pensions are going to be untenable going forward" and that "any responsible government" had a duty to reform the system.

"People do understand that people are living longer and therefore we need to react to that," she said.

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