Public v Private: the £23,300 gap in retirement deals

Council officer

She joins London local authority aged 30 on a salary of £25,000. Gets promoted and retires at age 65 on a salary of £70,000, at current prices.

Local government final salary pension is calculated by dividing her salary at retirement by 60, then multiplying the resulting figure by the number of years' service.

For 35 years' work, her pension is guaranteed to be £40,800 - paid from a pot of about £800,000 funded partly by staff but mainly council contributions.

Private sector

Company executive

He is recruited by "Widgets plc" aged 30 on a salary of £25,000. Same promotions as council officer, and retires at 65 on salary of £70,000. But the employer only offers a money purchase pension scheme with six per cent contributions each from worker and company, making 12 per cent in total.

The contributions are invested and his pension will depend on how well the investments perform — no guaranteed minimum. If investments grow at six per cent a year, his pension at 65 will be about £15,000. At seven per cent, it will reach £17,500.