Revealed: the top civil servants with pensions worth millions

From left: Sir Philip Barton of the Foreign Office, Tamara Finkelstein of the Department for Environment, Food and Rural Affairs and Sir Matthew Rycroft of the Home Office have the largest pension pots among civil servants

Britain’s most senior civil servants have amassed gold-plated pensions worth millions of pounds, it has been revealed, as the cost of running public sector retirement schemes spirals.

The top 20 civil servants running government departments are entitled to a pension worth £1.1m on average, according to analysis of accounts by the TaxPayer’s Alliance campaign group.

Sir Philip Barton, the Foreign Office’s most senior civil servant, has the largest pension pot, the group found, worth more than £2m.

Sir Philip, who faced calls to resign in 2021 after spending 11 days on holiday after the fall of Kabul to the Taliban, is guaranteed an inflation-linked retirement income currently worth £92,500 each year, plus a lump sum of at least £235,000.

Sir Matthew Rycroft, the most senior civil servant at the Home Office who has overseen record levels of net migration, ranked second, with a pension pot worth £1.7m which will pay an annual income of almost £103,000.

Tamara Finkelstein, of the Department for Environment, Food and Rural Affairs, came third, with a pension pot worth around £1.7m.

Civil servants and other public sector workers enjoy “defined benefit” pensions, which guarantee an income in retirement until death. These gold-plated pensions are so expensive for employers to maintain that they have largely been phased out of the private sector.

Instead, most private sector workers are enrolled in defined contribution pension schemes, which invest their savings and are vulnerable to fluctuations in both the stock and bond markets.

It means while retired public servants receive a predictable income each year, most other retirees have to constantly monitor their pension to make sure they do not run out of money.

While the typical private sector worker contributes around 5pc of their salary into their pension, in the civil service pension scheme it can be as high as 8pc. However, this comes with much higher employer contributions – the Government pays as much as 30pc to its highest-paid workers, compared with a normal rate of 3pc in the private sector.

Jonathan Eida, of the TaxPayer’s Alliance, said people would be “shocked” by the nest eggs of top bureaucrats. He said: “Senior civil servants enjoy retirement packages that most private sector workers could only dream of, with the taxpayers who pay for them being crushed under the weight of the tax burden.”

Taxes as a share of GDP are expected to hit a new post-war high of nearly 38pc by 2029, according to forecasts released by the Office for Budget Responsibility last week.

Mr Eida said: “It’s time to reform these overly-generous schemes, and bring public sector pensions into line with similar benefits enjoyed by those in the private sector.”

Public sector pensions made up two-fifths of the national debt in 2021, at £2.3 trillion, according to government accounts.

Civil servants retire at 62 on average, three years earlier than the national average, a Freedom of Information request submitted by this newspaper has previously revealed.

Most private sector workers have to wait until they reach around the state pension age until they can afford to retire. This is currently set at 66 and is in the process of rising to 67, but is legislated to increase again to 68 by the mid 2040s.

Meanwhile, the normal retirement age in the civil service pension scheme is 60 for those who started contributing before 2007, but some workers can apply to retire as early as 50 on a reduced payout.

A Government spokesman said: “Pensions are an important part of the overall public sector remuneration package, ensuring that we are able to recruit and retain the best talent.

“Civil Service pensions have undergone substantial reform since 2015 to ensure they are cost effective for the taxpayer. This includes removing final salary pension schemes.”

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