This chapter considers both public service pensions and public sector pay. It starts in Section 5.2 by looking at the direction of reform of public sector pensions in recent years and the government's latest changes, in particular focusing on their impact on the average generosity (and therefore cost) of these schemes and their implications for different types of public sector workers. Section 5.3 then turns to examine public sector pay, providing a careful comparison with the pay of workers in the private sector. In particular, this section examines whether any differences in pay are long-standing or new, and the extent to which they vary across different types of workers or across regions of the UK. Section 5.4 concludes.