A new financial study suggests that the UK’s public sector debt is more than a trillion pounds higher than official government figures.

With the inclusion of pensions and off-balance sheet investments, up to 1.13 trillion pounds may be added to the current estimated public sector net debt of 932 billion pounds, says a report published on Monday.

Researchers from the Centre for Economics and Business Research, and the Institute of Chartered Accountants in England and Wales (ICEAEW) note that while the report calculates the total debt figure using publicly available data, there is uncertainty surrounding many of the figures.

“Our research draws upon existing publicly available data and previously undertaken analysis to illustrate that the liabilities that are not included in the official public sector net debt figure are large but, in many cases, uncertain,” the report’s author and managing economist for CEBR, Charles Davis, told The Telegraph.

The bulk of the hefty sum comes from unfunded pensions for public-sector workers like civil servants and teachers, Reuters reported.

Researchers also urged transparency in the public finances sector and called on the Office for Budget Responsibility to raise awareness about the liabilities which are currently omitted from the public sector debt assessments.

“While there are important debates to be had about specific spending cuts, I believe that meaningful reform is necessary to underpin sustainable public finances over the long term and create a culture of fiscal responsibility,” the Times quoted ICAEW Chief Executive Michael Izza as saying.

Fears that any recovery in house prices will be short-lived were growing last night – following a series of devastating reports about the future of the property market.

In an unprecedented warning, four leading experts raised concerns that the housing market could be teetering on a knife-edge for the next decade.

They included accountants Pricewaterhouse Coopers, the Royal Institution of Chartered Surveyors, a leading economic consultancy and the Council of Mortgage Lenders.

Their warnings will worry millions of homeowners who have bought in recent years and comes amid a backdrop of reduced availability of home loans as banks – still recovering from the credit crunch – seek to rebuild their profits.

The first warning, from Pricewaterhouse Coopers, said house prices could remain below their peak levels for the next decade.

This will directly affect around 3.6million people who have bought a property since house prices reached record levels in 2007

Millions of homeowners have stretched themselves to the limit by taking out a supersize mortgage, but fear their property may never be worth as much money again.

Pricewaterhouse Coopers says there is a ’50 per cent chance’ that your home will be worth less in 2020 than it was in 2007.

John Hawksworth, head of macroeconomics at Pricewaterhouse Coopers, warned: ‘House prices remain vulnerable to setbacks.’

His analysis is based on ‘real’ house prices, that is the value of your home if the impact of inflation is ignored. A second report says prices could plunge by 25 per cent over the next three years, wiping nearly £40,000 off the average house price.
This means the value of your home could drop to a level not seen since 2003, according to the research by the consultancy Capital Economics.

Ed Stansfield, chief property economist, blamed ‘the huge scale of the fiscal squeeze we are about to see’, such as rising unemployment and ‘ further pressure’ on household incomes.

His forecast is that prices will drop 5 per cent this year, followed by 10 per cent in each of the following two years.