Some Pensioners Doing Very Well
MPs and mandarins can retire with saving plans the rest of us can only dream about, reports Faith Archer
Meagre improvements to state pensions for women in this week's Pensions Bill highlighted the gulf between the "gold-plated" pensions enjoyed by MPs and the public, experts said.
After 30 years of contributions, a backbench MP on £60,277 a year can look forward to retiring at age 60 on a final-salary pension of almost £39,000 a year, according to calculations by actuaries Watson Wyatt.
A person making the same contributions to a private pension could generate less than a fifth of the MP's risk-free returns, at £7,160 a year.
If they worked for a generous employer that topped up their 10 per cent money-purchase pension scheme contributions with a further 15 per cent, they could expect a pension of £18,000 a year.
To fund the same pension benefits as an MP, an individual would need to save a staggering £1.25m.....
While the Pensions Bill will raise the state pension retirement age to 68 by 2046, MPs and public sector employees can still retire at 60.
The Bill also announced that cash-strapped pensioners could endure another nine years of the state pension falling behind average earnings, in the same week that the Government confirmed that Paul Gray, the acting chairman of HM Revenue & Customs, is entitled to a pension pot of £1.7m.