Money

Civil servants with £100,000 yearly pension pots triples

Published

18 hours ago

September 19, 2024

Civil servants with £100,000 yearly pension pots triples

Civil service pensions, in contrast, promise an inflation-proof income guaranteed by the taxpayer – paid as a percentage of either their final or career average salary.

They go up in line with each September’s inflation figures and increased 10.1pc last year, with a 7pc rise expected to follow next April adding an estimated £3bn cost.

The number of retired civil servants getting more than £50,000 a year from the Whitehall pension scheme has jumped by 53pc from 3,092 last year to 4,741 this year.

In contrast, Government statistics show the average annual income across all workplace pension programmes stands at just £10,700.

John O’Connell, the Chief Executive of the TaxPayers’ Alliance, added: “Households feeling the pinch will be shocked at the growth of these pension pots.

“Bureaucrats enjoy unfunded retirement packages that dwarf the deals for most employees in the private sector, despite the taxpayers who pay for them seeing their own savings squeezed.

“Ministers need to crack down on overgenerous pension arrangements in the public sector.”

Neil Record, chairman of think tank the Institute of Economic Affairs, said that civil servants enjoyed pensions that are “no longer available to ordinary workers”.

“This is in effect a tax on future generations for a private benefit that well-heeled public sector retirees are now receiving,” he said.

Liz Emerson, founder of the Intergenerational Foundation, added: “These are unfunded pensions meaning that our children and grandchildren will have to cover the difference between workers’ contributions to and what has been promised by the government of the day.”

It comes after new figures revealed that the number of civil servants who are earning more than £100,000 has almost doubled in the last seven years.

The number of officials who take home six figures has reached 2,050 – a rise of 88pc since 2016 – of which 195 are now earning a salary of more than £150,000.

That is despite the fact that the Treasury has in recent years twice introduced pay restraints to try and cut down on the wage bill and get spending under control.

Ministers capped wage rises for mandarins at 1 per cent between 2016 and 2018 and froze salaries altogether in 2021 to try and bring the cost of Whitehall down.

Downing Street is “concerned” by how Whitehall has “inflated” officials’ pay grades to get around successive Government attempts to rein in salary increases.

Senior Government sources said that Downing Street was “very much looking at” how to crack down on the over-use of promotions to get around the rules.

One told The Telegraph that there was “absolutely no reason” why officials should be able to use “automatic promotions” as a loophole to increase their salaries.

Another added that the answer lay in performance-based pay, which would see the most productive mandarins rewarded more despite their salary grade.

The Whitehall source said: “The fastest way of creating a smaller civil service is increasing productivity.

“That’s why we are taking inspiration from the private sector in rewarding the high performers and looking at how AI could fulfil basic actions.

“The civil service must be brought into the modern world.”

Meanwhile new analysis reveals the cost of providing old age pension benefits is on course to outstrip spending on education, policing and defence combined within two years.

Ethereum is still home to the most active crypto developers and is the most attractive chain to build applications on top of for big companies, argues Bitwise’s Matt Hougan.

Source link