The number of people in the public sector’s largest pension schemes retiring on incomes of more than £100,000 has more than tripled in the past seven years, according to figures obtained by a charity promoting intergenerational fairness.
Pensions schemes covering the NHS, the civil service and the teaching profession were paying six-figure incomes last year to 375 retirees, up from 117 in 2010. Those in receipt of pensions higher than the UK’s average annual salary of about £28,600 also increased by 46% – up from 78,000 in 2010/11 to 115,000 in 2017/18.
The Intergenerational Foundation said the figures, which it obtained through freedom of information requests, illustrated a growing divide between the generations.
Angus Hanton, the co-founder of IF, said the figures excluded the state pension, which adds another £8,767 to the incomes of new retirees and would likely push the pensions of thousands more public sector workers above the average wage.
He said successive governments had sought to protect those close to retirement at the expense of a younger generation whose pensions would be much less generous.
He called on ministers to consider withdrawing the state pension for retirees on high incomes.
“The government should consider means-testing the state pension so that recipients of pensions over £50,000 are disqualified from receiving it,” he said.
Public sector workers have agreed cuts to their pension schemes over the past 10 years, but the reductions have fallen on younger workers entering the schemes, the charity said.
“These pensions are based on flawed assumptions made years ago about life expectancy, interest rates, contribution rates and levels of pay which successive governments have wilfully ignored,” he said.
“Younger workers will not receive such generous pensions, yet they are expected to keep paying for these pensions while having to contribute far more for their own old age. If ever there was an example of passing the intergenerational buck, this is it.”
The figures illustrate the burden on the public sector schemes of commitments to pay a proportion of workers’ final salaries as a retirement income.
He said the way defined benefit pensions were calculated made them even more generous during a period of soaring executive pay, especially in the health service.
The figures showed that 76% of those on pensions above £100,000 worked in the health service.