MPs face pension changes

MPs face pension changes
Published:  8 Jul at 9 AM
The pensions of Members of Parliament could be brought into line with other public sector workers. This would mean the replacement of final-salary schemes with a scheme based on average career earnings. The retirement age could also be pushed up from 65 to 67 and, after that, 68 years.

The pensions review by top government ministers and members of the Labour party comes ahead of an expected recommendation by the Independent Parliamentary Standards Committee that the salaries of MPs should be increase by £10,000. This would push the earnings of the average MP to £75,000 per year.

Since the expenses scandal of 2009, the control of pay and pensions for MPs has been handed to Ipsa. This could mean that if MPs want to reject the pay rise – as voters are sure to demand they do – they may have to pass new legislation in order to block the recommendation.

Retired MPs cost the British taxpayer around £13.5 million annually. Money would be saved if final-salary schemes were abandoned. MP’s pensions would then be similar to those being offered to other public-sector workers including teachers, civil servants, local government employees and NHS staff.

The publication of Ipsa’s report will be followed by a consultation, but any final decision on pay and pensions could be handed to a watchdog.