Shirehall finance chiefs have  strongly defended the record of Shropshire’s main pension fund.

Their comments came as new figures revealed that the annual cost to the taxpayer for the pensions of millions of retired public sector workers will more than double during the next five years. The cost nationally is set to rise from £4bn in 2010/11 to more than £9bn in 2014/15.

This is an increase of 20 per cent a year in real terms, according to the Office for Budget Responsibility – the Government’s new and independent fiscal watchdog – which published the data in its first report.

The soaring costs come on top of employer contributions from organisations like the NHS and town halls, all borne by the taxpayer, totalling £18bn a year.

The pension burden will rise because of a growing number of civil servants and Government employees retiring and living longer.

Positive

But Laura Rowley, Shropshire Council’s director of resources, said today’s figures did not relate to local government pension schemes which the OBR report had made “positive” comments on.

The Shropshire Pension Fund, which currently stands at about £900 million covers a number of employers, including Shropshire Council and Telford & Wrekin Council.

Mrs Rowley said 80 per cent of its income came from investment returns and the cost to council taxpayers in the county was 4p in the pound, one of the lowest contributions in the country.

Mrs Rowley said that she was worried that the Shropshire scheme would “get swept up in the general adverse comments” about pension costs.

Today’s national figures are bound to put huge pressure on ministers to slash the soaring bills, putting the Government on a collision course with public sector unions.

Deputy Prime Minister Nick Clegg said the pensions were “unfair” and simply “not affordable”.

Almost 90 per cent of state employees receive final salary pensions.

This compares with 16 per cent of workers in the private sector.

He said: “It’s not just unfair, it’s not affordable. As we face up to living within our means, we cannot ignore a spending area which will more than double within five years.”

The details were announced as economists warned Chancellor George Osborne may have to announce additional public spending cuts or tax increases of £34bn a year in his emergency Budget next Tuesday.

By Dave Morris