UK government considers career-average pensions for ministers

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  • UK government considers career-average pensions for ministers

UK - The government has revealed details of possible reform for ministerial pensions, with changes that will bring MPs' retirement benefits in line with changes to the overall pension system.

A review was ordered last year of the £291m Parliamentary Contributory Pension Fund, with the results delivered to former prime minister Gordon Brown, but only published yesterday.

The report recommends changes including increasing the normal pension age from 65 to 68, increasing pension payments by no more than 2.5% per year and moving away from a final salary scheme to a career-average one.

Sir George Young, leader of the House of Commons, said yesterday that while the upcoming Hutton review of public sector pensions, chaired by former Work & Pensions secretary John Hutton, did not explicitly include the Parliamentary scheme, any changes should nevertheless be informed by its results.

"We will, therefore, await Lord Hutton's recommendations on public service pensions," he said.

"However, in the specific case of MPs, there is broad party political acceptance the current final-salary pension terms for Members of Parliament are not sustainable and that reform is needed."

Both public and private sector pensions have seen reforms over the last few months.

As of April next year, both will be linked to the consumer price index, rather than the retail price index.

Additionally, chancellor George Osborne announced the state pension would again be index-linked from the same time, either rising by earnings, prices or 2.5%, whichever measure is highest.

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