KATE LOMAX, 40, from Hertford, used to work in finance but took a career break when her children were born. Now she is thinking of training to be a teacher.

She wants to work with children, but also needs to make sure she has a decent pension. “I want to go back to work and do something worthwhile,” said Lomax. “But I have also reached an age when I think about my retirement – and I know that workers in the public sector get a good deal.”

These days, one of the attractions of a job in the public sector is the pension, as the gap between retirement benefits of public and private-sector workers gets wider.

Last month the government scrapped its proposed reform of public-sector pensions after fierce opposition from trade unions. Labour had suggested that from 2013, teachers, NHS workers and members of the civil service should retire later, at 65 not 60. The unions fought back, threatening a mass walkout if the government pressed ahead with its plans.

In the end, a deal was struck. The retirement age will stay at 60 for present scheme members, but a higher retirement age will be phased in for new staff. The agreement didn’t please everyone, however.

Critics rounded on the government for creating a pension divide. Tom McPhail of Hargreaves Lansdown, an independent financial adviser, said: “The challenge for the government is to justify this socially divisive, two-track pension system, where public-sector workers get huge guaranteed pensions paid out of taxation, while private-sector workers struggle to fund their own retirement.”

There might be more political trouble ahead if the government follows up the suggestion of the Pension Commission and raises the state retirement age from 65 to 67.

John Cridland, deputy director general of the Confederation of British Industry, said: “It is not economically feasible or politically sustainable to allow public-sector employees to continue to retire early on pensions subsidised by the taxpayer, while people in the private sector will be working until 67.”

So why the gap — and why is it getting wider? Public-sector pensions are generous. Most are final-salary schemes, linked to an individual’s earnings at retirement. This means they don’t have to worry about topping up contributions or the performance of investments.

Final-salary schemes were once the norm in the private sector, too. But most companies have closed these schemes to new entrants. Instead, their pension income depends on the level of contributions and the vagaries of the stock market. And returns are not what they used to be. The FTSE 100 index of Britain’s biggest companies has fallen 14% over the past five years.

Do government workers have to pay a high price for such a top-notch pension? Well, no. Some public-sector schemes are non-contributory — your pension costs you absolutely nothing. Even if you have to make a contribution towards the scheme, it can be as low as 1% of your salary.

Workers in the private sector are not so fortunate. They almost always have to contribute to their pension schemes — typically 5% to 6%.

Public-sector pensions are also pretty secure. After all, the government is unlikely to go bust and leave you in the lurch. The same is not true for those in the private sector. Sadly, there are plenty of examples of workers left with next to nothing after years of service.

Stephen Yeo, a partner at Watson Wyatt, the pensions consultant, said: “The security of a defined-benefit pension promise is a major factor contributing to public-sector employers’ ability to attract and retain skilled staff.”

The Pensions Policy Institute (PPI) even puts a figure on the generous pensions. Chris Curry, research director of the PPI, said: “Higher public-sector pension benefits are typically worth an extra 5% to 20% of salary.”

If you think the bigger pension makes up for a smaller salary, you are behind the times. The PPI has not found any conclusive evidence that public- sector workers are lower paid. On the contrary, there are more lower-paid workers in the private sector. Full-time public-sector staff took home on average £475.10 a week this year — about £62 more than their counterparts in the private sector, according to the Office for National Statistics.

Public-sector pay began outstripping the private sector in 1997, when Labour came to power. Last year, government workers were given average pay rises of 4.1% compared with 2.5% in the private sector.

Of course, if you get paid more, you will also be entitled to a bigger pension. And it was the mounting cost of public- sector pensions that prompted the government to suggest the change to the retirement age.

Most public-sector schemes are “unfunded”, which means there is no pot of money set aside to pay the pension incomes of people who retire. Instead, today’s workers pay for today’s pensioners. The main problem is that people are living longer, so they claim their pension for more years.

The liabilities of unfunded public-sector pensions are about £690 billion, according to Watson Wyatt, and are rising by about £30 billion to £35 billion a year. Some of the costs will be met by employee contributions, but by no means all. The taxpayer has to make up the rest.

Something has probably got to give. The deal struck with the unions means that new recruits to the public sector will have to work until they are 65 if they want to retire on a full pension. The unions have agreed to cost savings of about £2 billion, which suggests some existing workers may have to accept lower levels of benefit or higher contributions.

But for the moment, public-sector schemes remain the envy of workers in the private sector.

No wonder the government workforce grew 10% between 1998 and 2003. A pension is not perhaps the most obvious reason to join the NHS or become a teacher, but it could be one of the most valuable.

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