Britain’s top civil servants are in line for taxpayer-funded pension pots worth an average £1.3million, it can be revealed, as private sector workers trying to save for retirement face a tax raid in the Budget.
New research into Whitehall’s ‘mandarin millionaires’ has found that the combined pension pots of 22 of the most senior officials in government departments total a massive £27.8m.
Five have built up funds topping £2m over their careers including the embattled head of the civil service while another 14 have more than £1m to look forward to in retirement, the analysis by the TaxPayers’ Alliance found.
Cabinet Secretary Sir Chris Wormald, who is seen as being at risk of being ditched by No 10 and who was criticised in last week’s Covid inquiry report, had a pension pot worth £2.49m in March this year.
He will enjoy a bumper £122,500 every year once he retires, almost double the average accrued annual pension of his fellow senior civil servants which stands at £70,500.
The civil servant in charge of the Home Office while the immigration crisis unfolded had an even bigger pension pot, worth £2.5m.
Sir Matthew Rycroft, who left the department in March, will also have an annual accrued pension of £122,500 when he retires.
Half of the permanent secretaries across Whitehall can look forward to receiving a huge lump sum when they step down as well as generous annual incomes.
Sir Chris Wormald, head of the civil service, has a taxpayer-funded pension pot worth £2.49m
Sir Matthew Rycroft, who stepped down as the top civil servant in the Home Office earlier this year, had built up a pension pot worth £2.5m
David Williams, the most senior civil servant in the Ministry of Defence who is stepping down soon, will get a £237,500 lump sum while the top official in HM Treasury, James Bowler, is in line for £202,500.
Yet the generous civil service scheme, part of the wider £1.3trillion liability for public sector pensions, is ‘unfunded’ with no money set aside for it and general taxation required to cover its costs.
Details of the gold-plated publicly funded nest eggs handed to civil servants come as Rachel Reeves prepares to launch a £3billion raid on private sector pensions.
The Chancellor is expected to impose major restrictions on ‘salary sacrifice’ schemes that allow employees to put extra money directly from their pay cheques into their pension pots without paying National Insurance.
She may also reduce pension tax relief for high earners or reduce the tax-free amount retirees can take from their private pensions as lump sums in tomorrow’s make-or-break Budget.
John O’Connell, chief executive of the TaxPayers’ Alliance, told the Daily Mail: ‘Taxpayers are sick of this experiment in trickle-up economics, where working people and pensioners are dragged into higher rates tax just to pay for the unsustainable pay, pensions and perks of those in the public sector.
‘In particular, it is those at the top of the pile in Whitehall who best represent the gross unfairness of public sector pensions, which unlike private sector pensions are completely protected from inflation and market shocks.
‘It’s time to end this appalling injustice and bring public sector pensions into line with private sector pensions.’
Reform UK’s deputy leader Richard Tice, who has warned that unfunded pension liabilities pose a greater risk to the economy than climate change, added: ‘The country is going bust and cannot afford these unfunded gold-plated civil service defined benefit pension schemes when productivity is collapsing.’
But a Cabinet Office spokesman insisted: ‘These figures represent the pensions of the longest serving and most senior members of the Civil Service – just a handful of individuals – and reflect their length of service.
‘Civil Service pensions have undergone substantial reform to ensure they are cost effective for the taxpayer. This includes removing final salary pension schemes.’