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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semperfi's picture

tasteless mushy food

so you've tried their SPOTTED DICK have you ?

kito's picture

unless it was a secret ingredient in one of their numerous bland pot pies, i would say no.........

JustObserving's picture


If you are gay, you may relish that dish - nothing wrong with that.

Edith Cresson, Prime Minister of France, said that 25% of Englishmen are homosexual.

French women had this explanation:

"Too many years in all-male boarding schools," one Frenchwoman explained.

Unfortunately for British men, some Englishwomen agreed with Cresson:

"More disturbing to Englishmen is that some Englishwomen agree. "In an English street, you might as well have a paper bag over your head for all the notice any man takes of you," wrote Lesley Garner in The Daily Telegraph, adding that Mrs. Cresson had given a "hurtful, shocking and uncomfortably accurate view" of British men."

kito's picture

so that explains the ugly british women, must be some type of evolutionary thing where the pretty genes are eventually phased out by natural selection due to the lack of attention by those blokes.........

Lore's picture

"so that explains the ugly british women"

It's the same everywhere. People in Western countries don't care about their appearance anymore.  Most can no longer afford to dress nicely.  Those who do stand out, are ostracized and become targets.  So it becomes normative.  Anything goes, and standards are lost.  The Wal-Martian is the trend-setter for the new century.

I Feel a little Qeasy's picture

Ha ha ha! An American talking about others' accents presumably in his own droning monotonous nasal whine, what a cunt!

You've obviously never actually met an American woman, at least that's a positive you fat tea-total xenophobic sun-burnt fuck-pig.

hooligan2009's picture

great article..some facts on the table.

couple of points

1. the UK pays one of the lowest state pensions in the world.

2. germany, france, japan and the US are in a far worse position (err..that may not be a UK recommendation).

3. alternatives are to inflate, default or "extend and pretend" government debt. either way, state pensions will be pennies in the dollar/pound/euro. When (not if) this happens, elderly folk without private pensions will starve and die of disease. luckily the old will be to weak and frail to fight and there kids will all be addicted to i-pads.

4. expect taxes on 401 k's and other private pension plans to attract a 50% tax rate above the state pension.

MiniCooper's picture

Hey Tyler. I live in the UK.

Thats my unfunded pension you are talking about. No worries though - a few of us have figured out we are not going to get a pension anyway. No pension - no liability.

It really is that simple. Only problem is that the politicians still have to work out how they are going to tell the other 90% that haven't yet worked it out and still lthink they will get a pension after paying years of National Insurance (social security contributions).

Bossuet's picture

Hello citoyens des USA, il vous suffit de patienter encore un peu, n'est-il pas ?


Pétrole  : Les Etats-Unis premier producteur vers 2020, selon l'AIE

Qu'en pensez-vous ?

Peter Pan's picture

The huge divide between promises of government and the expectations of people on the one hand and the ability of the system to deliver on the other is so great that I am bewildered at the total BS spewed out by polticians and economists about the strength of all economies.

Up until now people have generally managed to keep mind and body together but it is clear that this luxury is fast running out.

ItsDanger's picture

Unfunded pension liability.  Estimate how much of that is tied to ZIRP.  Unintended consequences?  You havent seen anything yet.  Its a snowball rolling the mountain turning into an avalanche.  This hardly gets discussed anywhere yet is a MAJOR problem.  Cut out the political crap on TV and put an actuary on for once.  Sad thing is that many of these plans STILL have unrealistic expected rates of return.  Why?  To cover up the problem and keep funding low.

SillySalesmanQuestion's picture

Hmmmm...wonder how that happened...?

northerngirl's picture

Oh, I'm not worried this problem will be passed to the next generation just as all others.

nofluer's picture

Am I correct in assuming that Northerngirl is being facetious? Voting up on that basis... (Knew her on Newsvine - and she was pretty sharp over there...)


Chuck Walla's picture

Though he was unaware, Charles Ponzi deserves a debt of gratitude for giving the state the germ of an idea for unfunded pension and social security plans. Vote buying on a massive scale and no taxpayer dollars used(for once). Its brilliant. Politicians have successfully handed out empty candy wrappers while convincing the dimwit class they are full of sugary goodness.



BattlegroundEurope2011's picture

Not to worry the UK govs. will (and already started) increase the Pension age.  So most likely ppl will be dead before they can retire.


QuietCorday's picture

I am British and my retirement age now stands at 68. I strongly suspect this will rise over the next twenty years to something more like 75, maybe even 80.

Britain is screwing its young like no tomorrow. No, strike that -- it is eating its young. Taxes have increased dramatically since 1997 to fund our joke of a government spend (council tax has doubled, VAT up, petrol is a joke due to the escalator, new taxes on utilities etc ...), and wages are pretty much stagnant, if you can find a job in the first place that is.

Not only that but we didn't have the housing crash the US had, so on top of all this ... house prices are still somewhere in the region of £200,000 ($318,000) for a tiny two-bed semi in a reasonable area (read: not heading towards slumsville) outside of the South East. The transfer of wealth from young to old is astonishing; you get old ladies selling houses 40 miles away from a urban centre, but demanding ten times the average local full time salary for about 700 square feet of living space in total (no joke, Americans would class some of the kitchens I have seen as cupboards).

I live in an area where there are no jobs. I commute for four hours round trip for a just above average wage, and then freelance on top of that. The average salary in this area is about £24K pa. The average family home (three bed with a garden and a drive) now stands at £250K in our area. No-one under 35 can afford pretty much anything at all, and we are being chipped more and more with every passing year.

Yet the sheer number of Porsche Cayennes and top of the range Mercs on our roads is extraordinary -- all driven by retired boomers who can also claim winter fuel allowance.

My generation and the two below me just cannot afford to keep this ludicrous state of affairs going. We just don't earn enough. We are being slowly impoverished.



Stuntgirl's picture

You have described Spain in 2007.

Floodmaster's picture

A generation born to a life of servitude.

Lewshine's picture

Add a million zeros to the EU obligations...Means nothing! If it did, it would have already! The more ridiculous, the greater the fraud, the more jaw dropping the result of recovery...Be it fake or not! The abuse of law, coupled with propaganda, creates longevity!

q99x2's picture

That is soo Greek. Lie to the people then when they complain starve them. Ooooo I don't like banksters.

nofluer's picture

While Unions are being so supportive of the Liberal Left, and as a consequence negotiating record or near record pension promises, perhaps they should re-evaluate that political support as they consider that a promise is not a delivery. ie it's EASY for governments to promise pension payments for 20 or 50 years down the road... not so easy to deliver on the promises made 20 or 50 years ago!

At a certain point in the past, I was asked if a certain person (not me) should contribute to a 401k. My response was simple - "Does your employer provide matching amounts in excess of 50%? If yes, then you should participate. If no, forget it. And at that point in the future when you leave the company, you cash out and pay the tax penalty, and reap a 40%+ profit. It's like giving yourself a tax deferred raise!" It was really fun to see this person spend the money from a company that paid 200% matching!!!

Do *I* have a retirement fund? Nope. Given inflation and the direction I saw the economy going in as long as 30 years ago, I prefer the "I NEED my money NOW!" approach. (aka pay me as I go.) I worked for the US Postal Service for 11 years. When I left I took my money with me and paid off ALL of my debts with it!

Not being entirely stupid, yes... I have made inflation proof investments - ie we are really close to paying off the mortgage on the farm. As long as we can climb up on the tractor, poke a few seeds in the garden and pick up sticks for the wood stove, we'll get by.

In short - WE control our "retirement" provisions - not some corporation or bank or government. As my mother used to say, "You can't eat promises."


El_Puerco's picture

¿A ver aquí les va un acertijo? ayuden mee a resolverlo?.... ¿En qué país , la deuda es 1,000% del PIB ? Guess Which Country Has Debt Of Nearly 1000% Of GDP?...



nofluer's picture

Just a wild guess... Argentina?

ShrNfr's picture

Nope, read my comment earlier. The US future obligations in present day dollars are 1,350% of the GDP according to the CBO. $220,000,000,000,000 and increasing at ~5% a year or $11,000,000,000,000. Good luck with that. This is including medicare, social security, the drug bene, and all the rest.

giggler123's picture

Nothing like a world war to trim that down to size.

shovelhead's picture

I'm glad I live near a college town.

Them young uns are pretty tender except for their texting thumbs.

Long pig...the other white meat.

dolph9's picture

Well, look.  If you're modern national mythology is that you saved the world from those evil Germans, then don't be surprised if you eventually end up the slave of the Jewish banksters who run America.

Pseudolus's picture

At what point does an inter-generational transfer scheme become a Ponzi?