The UK's Most Disturbing Number: Total Unfunded Pension Obligations = 321% Of GDP

Tyler Durden's picture

For all our UK readers, who hope some day to collect pension benefits, we have two messages: i) our condolences, and ii) you won't.   Why? The answer comes straight from the ONS:

The new supplementary table published by ONS in Levy (2012)10 includes the following headline figures for Government pension obligations as at end December 2010:

  • Social security pension schemes (i.e. unfunded state pension scheme obligations): £3.843 trillion, being 263 per cent of gross domestic product (GDP) (£3.497 trillion at end of December 2009)
  • Centrally – administered unfunded pension schemes for public sector employees (i.e. unfunded public service pension scheme obligations): £852 billion, being 58 per cent of GDP (£915 billion at end of December 2009)
  • Funded DB pension schemes for which government is responsible: £313 billion, being 21 per cent of GDP (£332 billion at end of December 2009).

In summary, the estimates in the new supplementary table indicate a total Government pension obligation, at the end of December 2010, of £5.01 trillion, or 342 per cent of GDP, of which around £4.7 trillion relates to unfunded obligations.

Or visually:

Of course, US-based readers should not get their hopes up too much either. With total underfunded liabilities - including SSN and healthcare, in the US well over $100 trillion (on under $16 trillion of GDP) it is only a matter of time before the entire welfare state ponzi scheme blows up.

Source: ONS

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orangedrinkandchips's picture duh


(all due respect for author(s))

falak pema's picture

lol, this trillionisation of first world debt makes this look like chicken feed :

£48bn gap in next government spending review, says study | Politics |

Orly's picture

Seems the USDJPY pair is trying to decouple from the risk trade.  It could get interesting...

falak pema's picture

is there any correlation in real time via 4x plays between the way EURUSD evolves and the pairs that u follow : USDJPY and USDAUD amongst all the others?

I am assuming that 4x players are a breed apart, who specialise their capital market day trades to this segment only. I may be wrong on that assumption. 

Here is an example of what I mean : Mexican Peso Short Positions Rise - Business Insider

Acet's picture

If you resize that graphic to 20x20, the unfunded liabilities look much smaller.

OneTinSoldier66's picture

Good idea, I like it! Works for me.


Just curious, got an electron microscope handy that I can borrow?

booboo's picture

ol av a cup o tea and some Spotted Dick. The missus? Weil, she gets to watch.

EmmittFitzhume's picture

I've wondered how the NY Yankees can pay so much out in costs each year. Similar model as this. Finance it out to oblivion and pray to god it never catches up to you.  This type of shit is deeply embedded in so many institutions it's simply a joke now

otto skorzeny's picture

isn't GB basically just a huge welfare nanny state that masquerades as a country

SheepDog-One's picture

And the 'U.S.' is any different how?

mckee's picture

We don't know what "spotted dick" means?

Acet's picture

I myself thought that "spotted dick" had something to do with John Holmes until I moved to London ...

booboo's picture

We have Brwando the Thirst Mutilator, it's what the planet craves.

otto skorzeny's picture

I thought the article was about the UK?

LawsofPhysics's picture

In a world where fraud is the status quo, you might want to consider the natural resources of each nanny state and who really has possession of those resources.  That and who can defend those resources.  The game remains about power and control, period.

kito's picture

sheepdog, the u.s. is going to be energy independent shortly!! lots of jobs for everyone!! growth will return!!! cnbc said so!!!!

sheepie lets sing together:



My country where everythings for free....

sweet department of homeland security....obamas the king......

land where the constitution died......

land of the bankers pride......

from every citizens bent-over backside, let corporatocracy ring..........


ZeroPoint's picture

Jolly Good. I guess the Royal Family can always rely on its poppy fields in Afghanistan.

francis_sawyer's picture

Something attractive to the eye... & soothing to the smell...


otto skorzeny's picture

no way they're going to muscle in on the CIA's cash cow. I love that the US is now facing a huge heroin epidemic(at least here in the Chi burbs) and the MSM/ podunk cops/DAs can't figure out why.

Orly's picture

Another Chi-town conspiracy?  Sounds like it's turning into Way North Dallas...

pods's picture

God bless Gary Webb, the only man with balls enough to shoot himself in the head, twice.


francis_sawyer's picture

That's hard to do... Especially if you're a lefty...

ZeroPoint's picture

CIA has the cocaine market. The royals have a large stake in opium.



pods's picture

The whole world is circling the toilet.  Sooner or later a critical mass will wake up and realize it.

Let's hope that they figure out that it is the system that did it, instead of some idiot puppet politician.


Wakanda's picture

Yo UK!  We tried to throw those bastards out a couple of hundred years ago (with mixed results).

Let's get together and do it right this time - time to clean house, top to bottom, inside and out.

The Second American Revolution, getting rolling in a neighborhood near you.

orangegeek's picture

And when these markets top and turn, there's going to be even less for these pensions to dole out.


Have a niiiiiiiice day.

otto skorzeny's picture

can't they rely on big returns from USTs? i love the 8% return projections that all of the state/local govt union pensions expect to get on their investments-on what- their meth lab profits?

JustObserving's picture

Relax, Brits.  Kotlikoff has US unfunded liabilities at 1432% of GDP.  You have decades to go before you challenge the US, if ever.

NorthPole's picture

Talk of 5 trillions of 'unfunded liabilities' is bullshit because there is no formula that one can apply to compute how much your pension is going to be. Your future pension does not really depend on your current contributions; it is going to depend on how much money is available in the common coffer by the time you retire (and nobody knows how much is that going to be, so yes, it can very well turn out that you'll have to plant your own carrots if you don't want to starve to death).

It's a pay-as-you-go Ponzi, remember? Essentially, the deal is as follows: now, you agree to give away a certain percentage of your monthly income in return for a promise that sometime in the future (it is 65 years now but that can be raised any day) you'll get a monthly pension of an unspecified amount. 

Diplodicus Rex's picture

"Talk of 5 trillions of 'unfunded liabilities' is bullshit because there is no formula that one can apply to compute how much your pension is going to be."

What planet are you on? In the UK, the pension of a state employee is very easy to calculate and forecast.  The pension amount is a ratio of their years of service divided by 40 times their final salary. From there onwards it is increased in line with the CPI. What's not forecastable about that?

 However, where I do agree is that they have been made a promise which can't mathematically be kept. The fact that its not mathematically possible however, does not deter them from marching on the streets for more. They will indeed be planting carrots, they just don't know it yet.

"it is going to depend on how much money is available in the common coffer by the time you retire"

Yes and no. In the first instance, when there was not enough money in the coffers they borrowed the difference. This has been hapenning since 2001 in the UK. Eventually of course, this must come to an end and those promises will be broken. However, for the masses on state handouts, they will never know this is coming until the day they don't receive their first cheque.

NorthPole's picture

While there may be formulas, the very fact that - as you observed - it is mathematically impossible to deliver means that the formulas have to change, so it is as if they did not exist.

And that's my point. There is no '5 trillion of unfunded liabilities'.  There are no liabilities. When SHTF, they will simply raise retirement age and lower your pension down to the carrot level.

fxrxexexdxoxmx's picture

67 years and a permanet reduction to a lower rate if you want to get any earlier like many do/did at the age of 62. those born 1959 will pay more in than those before.. ponzi is as ponzi does

kikk's picture

I just recieved a letter from HM Government telling me my pension age is going up anyway. I think they hope I'll die before they have to pay. And even if I don't, I just know the BoE will print enough to pay me.


Silversinner's picture

To make things worse,most of the private pension funds

are loaded with gouvernment bonds(I.O.U).

Why people take private pension funds?

I use to think it was to be less dependant on the

state,so it makes perfect sense then to buy state

debt obligations<sarc>


Dempster's picture

They've already pushed my pension date back to 66.

Now Zero Hedge push it back another 14 (I've decided to throw off the mortal coil at or before 80)

Which rather suggests I'm going to work till I die.

I suppose if I get lucky the arthritis in my knees may cause an impromptu fall from a scaffold, and put me out of my misery.

I’m piss-malling sick of reading these articles, they're bloody depressing.

otto skorzeny's picture

more good news for you - the off-putting of retirements only means that there are less jobs for the exciteable young-uns.

semperfi's picture

Producers need to step aside, go on holiday for a few months, become takers for awhile, demand more freebies from Govt for awhile, in order to speed up the implosion.  If you can't beat em, join em.

Acet's picture

Not to worry, there's a plan to solve this!

First, they'll index any inflation indexed pensions to a well-known, independent and unbiased interest rate such as the Pound LIBOR.

Then Merving King will accelerate the printers to maximum speed.

In a couple of years those £5 trillion will be fully covered!

King Solomon&#039;s mine's picture

Scary but hardly news. Hence open-door immigration policies, which change the ratio of working age population to pensioners, plus immigrant familes tend to have higher birth rates which will increase the working population in the future. Now all that is needed is an economy which can employ them. Otherwise let's hope for a few cold winters. Climate change, anyone?

ShrNfr's picture

Bunch of small time guys. The total unfunded obligations of the US federal government is $220 trillion according to the CBO. That is 1,300%+ of the GNP. Good luck with that kids.

pods's picture

And they probably use the government propped up GDP number for the calculation too.


three chord sloth's picture

The promises made during Spring and Summer, which seemed so easily afforded during times of real growth, are defaulted upon during the Winter. As they must be for Spring to come again. It is the nature of the long cycle.

zilverreiger's picture

so the unfunded part still has to be filled over the coming years? how much will they be short in the end, that's what counts

kito's picture

wow, and i thought their warm beer, ugly women, horrible accent, tasteless mushy food and crappy weather was bad enough............

Tinky's picture

Good racehorses, cheese and apples, to be fair.

JustObserving's picture

And you get arrested for a photo of a burning poppy on facebook:

Man Arrested For 'Posting Image Of Burning Poppy On Facebook'


pods's picture

The UK is light years ahead of the rest of the world in the great Police State race.  

They have camera's taping every single aspect of your life over there.  
The only things they miss are when the cops happen to execute brown people or when there happens to be a coincidental tube bombing/security exercise.

But to burn a paper flower?  WTF?



Overfed's picture

"Comments Closed for Legal Reasons". Freedom! /s