The government has official debts of about £1 trillion (approximately £38,000 for each UK household), but it also has other very real and very large liabilities. These include about £1 trillion for the pensions of government employees and over £2 trillion for the state pension scheme. These pension commitments are almost all unfunded – meaning they are not paid out of some massive accumulated fund, but out of current-account taxes.
In addition, there are unfunded liabilities relating to government guarantees, PFIs and nuclear decommissions, which add up to about £500 billion, making a total of more than £130,000 of government liabilities for each UK household.
Much of the government accounting for these liabilities is very poor, with some liabilities not having been calculated for several years; and the calculations that are made use some doubtful accounting practices. IF is closely monitoring what debts the government is building up for younger and future generations of taxpayers.