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Retirement Pensions

Volume 83: debated on Monday 22 July 1985

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asked the Chancellor of the Exchequer what is the present pension of a person who retired from (a) local government and (b) other sectors of public service immediately after the index-linked pension system became operative whose salary at that time was £3,000, £4,000, £5,000, £6,000, £7,000 and £10,000 respectively.

Since the size of a pension depends not only on final salary but on length of service it is not possible to answer the question as put. However, the annual pension of a public servant who retired on 27 July 1971, the date of Royal Assent of the Pensions (Increase) Act 1971, would now be roughly 4½ times larger in cash terms than when it was first awarded.For example, a local government officer who retired in July 1971 on a salary of £3,000 after a full career of 40 years' service would have received an original pension of £1,500 and would now be receiving a pension of £6,860. If his pensionable service had been, say, 20 years, his original pension would have been £750 and would now be £3,430. The comparable figures where the final salary was £10,000 would, for an individual with 40 years' service, be £5,000 in 1971 and £22,860 now; and for the individual with 20 years' service, £2,500 in 1971 and £11,430 now.The position for civil servants, NHS staff, teachers and members of the armed forces would be broadly the same as for local government staff. The pension of police and firemen would also be broadly the same assuming that they exercised the option of commuting a quarter of their pension into a lump sum.