A "wealth shock" of as much as £340,000 awaits many private-sector workers on their retirement, thanks to the collapse in the value of their pensions and reduced job security, especially in the recession.
However public-sector workers are now more likely to be well off in their old age and leave hundreds of thousands of pounds more to their dependants, research from the accountants PricewaterhouseCoopers suggests.
PWC says that a typical public-sector professional starting work in 1981 will have accumulated £340,000 more in net wealth by their death compared to their private-sector counterpart.
As the old private-sector pattern of "jobs for life" and final salary schemes has disappeared, the superior job security, pension provision and, in some cases, salary levels now prevailing in the public sector means that those who work for the state are set to enjoy markedly more prosperous retirements.
The PWC research adds to a feeling in some quarters that generous public-sector pensions are creating an unfair burden. The Conservative leader David Cameron has raised the issue and the CBI has claimed that the "trillion pound tab" for public pensions means that "taxpayers who are struggling to build their own personal pension will be lumbered for decades by the cost of covering public-sector workers who retire years earlier on risk-free pensions".
John Hawksworth, the head of macroeconomics at PricewaterhouseCoopers, said: "Conventional wisdom has generally been that private-sector workers, particularly those in financial services, have done better than public-sector counterparts in salaries and particularly bonuses. But our analysis suggests that, in many cases, it could be the public-sector tortoises that will end up with much better pensions and more wealth to pass on than the private-sector hares."
PWC reached its conclusions using a fable based on the notional lives of two people born in 1960, dying in 2040 aged 80, marrying, having two children and owning two houses during their lives. PWC assumed that the public-sector "tortoise" took a job with the Civil Service after university, saves a higher proportion of his salary in safer assets and puts down a 10 per cent deposit when buying his first house.
The private-sector "hare" saves less, puts a higher proportion of savings into shares, takes out 100 per cent mortgages and has consistently higher spending to the age of 50. The hare is "just a middle manager in a clearing bank or an insurance company" earning about £60,000 (including bonus) at his peak in 2007, but losing his job in this recession and becoming a self-employed financial adviser with a lower income. The tortoise is a middle-ranking civil servant earning just under £40,000.
In the accountants' modernised financial fable, the tortoise retires at age 60 with a generous civil service pension, enabling him to maintain his real spending levels at about 90 per cent of pre-retirement levels.
The hare lags behind in terms of spending and income from age 50 onwards and, despite working on part time until age 65, retires on a pension only about 40 per cent as high as the tortoise – a projected post-tax income in retirement, including his basic state pension, of only about £11,000 per annum.
Raj Mody, a partner in PricewaterhouseCoopers' pensions practice, said: "The tortoise and hare illustration should interest future pensioners, policymakers, young people thinking about future careers and companies marketing products and services to a population with a changing wealth profile."