Tube drivers to keep gold-plated pensions after Sadiq Khan bows to unions
Tube drivers will still be able to retire at 60 on their gold-plated pensions after Sadiq Khan bowed to union pressure by scrapping a planned overhaul of the scheme.
Rail workers took six days of strike action in 2022 and 2023, in part due to changes being proposed to their lucrative pension deals which could have seen them working for five years longer.
But the rail union, RMT, confirmed this week no changes would be made to the scheme in what it described as a 'huge victory' over Transport for London (TfL).
An underground driver who has worked for TfL for 40 years can expect a pension income of nearly £50,000. But in 2020, a review into the pension fund was launched by the Mayor of London with an aim to save £100m a year.
Discussions included moving rail workers on to less generous plans similar to those offered to MPs and NHS workers. TfL also considered increasing their retirement age from 60 to 65.
Mick Lynch, the general secretary of RMT, said: 'This is a huge victory for our members who showed tremendous tenacity to stand together to defend their pensions.
'We were told these cuts were inevitable, but our members' determination has ensured that these attacks on pensions have been thwarted.'
He added: 'This win proves that when workers are organised and willing to take strike action, they can defeat even the most determined attacks on their rights and living standards.
'RMT will continue to stand ready to take action to protect our members if any such attacks on pensions or terms and conditions come to pass in the future.'
The TfL fund, which has 85,439 members, is a generous final salary pension scheme, offering a 60th of a tube driver's salary for every year of service.
For a tube driver who works at TfL for 40 years, this would be equivalent to two thirds of their final salary – or £46,788, if they retire on the current salary of £70,182.
TfL pays contributions of 10.5pc of salary for new starters – with employees contributing 5pc. The transport body pays 11.67pc for existing staff. The fund had a surplus of £3bn at its latest valuation in March 2024, with auditors estimating that it had a funding level of 125pc.
A 2022 review, chaired by Sir Brendan Barber, a former trade union official, found that TfL could save up to £154.4m a year by switching to a Career Average Revalued Earnings (Care) scheme.
Other public sector schemes, including that for MPs and NHS workers, have switched to Care in the last decade. Another consideration was to put tube drivers on the Local Government Pension Scheme offered to council staff.
In 2023, the unions agreed with TfL that no changes would be made until September 2026, but last month it was confirmed that the pension review team had been totally disbanded.
Tom Selby, of pension provider AJ Bell, said: 'The pensions enjoyed by tube drivers are incredibly generous final salary arrangements – the sort that most private sector workers could only dream of.
'The fact these are going to be maintained, including the retirement age of 60, will be seen as a huge victory for employees and Mick Lynch, the RMT trade union's firebrand boss.
'It may also be a reflection of the improved funding position defined benefit schemes have enjoyed in recent years, in large part as a result of shifts in gilt yields which have reduced the accounting value of liabilities.'
Pensions can be taken at 60 with no reduction, annual payments will be linked to the retail prices index, rather than consumer prices index and TfL will be on the hook for any future deficits.
The victory comes days after Aslef called off some planned strikes on London's Elizabeth line after rejecting a pay deal of £76,000. Almost 500 drivers had been set to walk out during March.
A spokesman for Transport for London said: 'As part of our funding agreements with the last government, we were required to carry out a review of the TfL Pension Fund. Extensive work was carried out and we have always held the position that 'do nothing' remained an option throughout the process.
'No requirement on pensions featured in our most recent capital funding agreement with the new Government and our view is that the original condition has now been met. There are no plans being developed or actively considered by TfL to change the TfL Pension Fund.'
Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
an hour ago
- Yahoo
Data bill opposed by Sir Elton John and Dua Lipa finally passes
A bill which sparked an extraordinary stand-off between some of the UK's most high-profile artists - and their backers in the House of Lords - has finally been passed. Peers wanted an amendment to the drably-titled Data (Use and Access) Bill which would have forced tech companies to declare their use of copyright material when training AI tools. Without it, they argued, tech firms would be given free rein to help themselves to UK content without paying for it, and then train their AI products to mimic it, putting human artists out of work. That would be "committing theft, thievery on a high scale", Sir Elton John told the BBC. He was one of a number of household names from the UK creative industries, including Sir Paul McCartney and Dua Lipa to oppose the government. The government refused the amendment. It says it is already carrying out a separate consultation around copyright and it wants to wait for the outcome of that. In addition there are plans for a separate AI bill. Critics of the peers' proposal say it would stifle the AI industry and result in the UK getting left behind in this lucrative and booming sector. So, this left the bill in limbo, pingponging between the Houses of Commons and Lords for a month. But it has now finally been passed, without the amendment, and will become law once royal assent is given. "We can only do so much here. I believe we've done it. It's up to the government and the other place (the Commons) now to listen," said composer and broadcaster Lord Berkeley. The government has welcomed the wide-ranging bill passing. "This Bill is about using data to grow the economy and improve people's lives, from health to infrastructure and we can now get on with the job of doing that", a Department for Science, Innovation and Technology (DSIT) spokesperson said. Caught in the crossfire of this row were other useful proposals contained within the bill, including: New rules on the rights of bereaved parents to access their children's data if they die Changes to allow NHS trusts to share patient data more easily A 3D underground map of the UK's pipes and cables, aimed at improving the efficiency of roadworks by minimising the possibility of them being accidentally dug up. "So this is good news for NHS workers and the police who will be freed from over a million hours of time spent doing admin, bereaved parents who will be supported to get the answers they deserve, and people who will be kept safer online thanks to new offences for deepfake abuse," DSIT said. But even though the Lords have decided they had made their point on AI, the argument has not gone away. Those who fought the battle have not changed their minds. Baroness Kidron, a film maker who led the charge for the amendment, told me the passing of the bill was "a pyrrhic victory at best" for the government, meaning it would lose more than it gains. That cost, she argues, is the giving away of UK assets, in the form of creative content, to largely US-based AI developers. There are many who remain defiant and they believe strongly that the UK's £124bn creative industry is under threat if the government doesn't actively engage with their demands Owen Meredith, chief executive of the News Media Association which supported the Lords said the bill sent a "clear message" to the government "that Parliament, and the UK's 2.4 million creative workers, will fight tirelessly to ensure our world-renowned copyright law is enforced". "We keep being told that AI will change everything, which, I'm afraid, means that we will discuss this during debates on every bill," said Baroness Dido Harding in the House of Lords, recorded in Hansard. "We will prevail in the end." Peers demand more protection from AI for creatives Government AI copyright plan suffers fourth House of Lords defeat Sign up for our Tech Decoded newsletter to follow the world's top tech stories and trends. Outside the UK? Sign up here.
Yahoo
2 hours ago
- Yahoo
Britain ‘becoming a national health state' under Reeves
Britain is becoming a 'national health state' under Rachel Reeves, with treatment poised to account for half of all public services spending by the end of the decade. Analysis by the Resolution Foundation said the Chancellor was presiding over a 'major reshaping of the state' that will pave the way for more tax rises after she boosted NHS budgets in the spending review. The Left-leaning think tank said the health service was on course to account for almost £1 in every £2 of all day-to-day Whitehall spending by the next election. This is up from a third in 2010 and a quarter in 1999. Health accounts for 90pc of the extra public service spending over the next three years at the expense of other Whitehall departments, the Resolution Foundation said. This includes defence, which saw a much smaller increase in its day-to-day spending budget, although investment spending for tanks, planes and military bases saw a much bigger increase. The think tank warned that this trend had led to 'shrunken public services elsewhere'. It noted that while real, per-person funding for health was set to increase by 36pc between 2009 and 2029, spending on prisons and the courts would fall by 16pc while housing and local government budgets were on course to fall by 50pc over the same period. British families are already on the hook for the equivalent of £1,550 of tax rises after October's record £40bn raid by the Chancellor. But Ruth Curtice, the chief executive of the Resolution Foundation, said people faced more pain in the coming months. She said: 'The spending review was a huge deal as the Chancellor set out details of nearly £300bn of extra spending over the second half of the [current] parliament. But as the dust settles a few clear winners have emerged. 'The extra money in this spending review has already been accounted for in the last forecast. But a weaker economic outlook and the unfunded changes to winter fuel payments mean the Chancellor will likely need to look again at tax rises in the autumn.' Ms Reeves has been accused of sacrificing police and defence spending in favour of a record NHS handout, with households now facing higher council tax bills to pay to keep their streets safe. Treasury documents revealed that the Government was already forecasting a 5pc increase in council tax each year until 2028, meaning an extra £395 for the average B and D band properties. Ms Reeves's plans also show that total non-defence investment will suffer cuts on average for the rest of this parliament. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
Yahoo
2 hours ago
- Yahoo
'Not A Serious Analysis': Reeves' 'Baffling' Spending Plan Slammed By Leading Economists
Rachel Reeves' spending review has been slammed by leading economists who said it was not a 'serious department analysis'. The chancellor unveiled her plans to spend an extra £300 billion over the next three years on Wednesday, divvying out huge sums of cash to the NHS, net zero and defence – while also squeezing other Whitehall budgets. The government has said this is all an investment in Britain's renewal, and insisted that these decisions are fully-financed after Labour hiked taxes in last year's Budget. However, the director of think tank the Institute for Fiscal Studies (IFS) Paul Johnson tore into her announcement on Thursday. 'If you were baffled by the chancellor's speech yesterday, so were we,' he said during the IFS's analysis livestream on YouTube. 'It did not appear to be a serious effort to provide useful information to anybody.' He also seemed to criticise the premise that the economy is now in better place than it was a year ago, hence Labour's decision to spend again – and reverse some cuts. 'Despite some of the rather odd recent claims, neither the economic forecasts nor the public finances have improved relative to the genuinely difficult situation we knew about a year ago,' Johnson said. 'Rather the reverse. Hence some difficult choices.' Large council tax hikes have been included in the government expectations for the review, which also 'assumes that council tax bills will rise by 5% a year', according to the IFS chief. That means bills will rise at their fastest rate 'over any parliament since 2001-05.' Johnson laid into the cuts Reeves is imposing on other Whitehall departments in order to boost the NHS, defence and net zero, too. He said: 'Every department is facing the same administrative costs, 10% for all of them over the three years, and then another 5% in 2029-30. 'All of that is irrespective of how much they've grown, irrespective of planned spending increases, irrespective of anything at all. 'That is not the result of a serious department analysis. 'I hesitate to accuse the Treasury of making numbers up but…' He noted that total departmental spending is set to grow at 2.3% a year above economy-wide inflation. That's lower growth than was recorded over the 2019-2024 parliament, when it increased at 3.6% per year. 'This is a long period during which spending will be growing faster than the economy,' he said. Johnson even questioned the suggestion that the NHS had fared particularly well, noting: 'Health spending nearly always gets topped up. Growth of 3% a year is below the historic average.' Mounting pressures on spending, including the U-turn on winter fuel allowance for pensioners and the backlash against disability benefit cuts, means Reeves is expected to either introduce more cuts or hike taxes in the autumn Budget to pay for it all. Johnson noted: 'Nobody should be in any doubt that the chancellor has had some incredibly tough decisions to take. 'With spending plans set, and 'ironclad' fiscal rules being met by gnat's whisker, any move in the wrong direction will almost certainly spark more tax rises.' Nick Ferrari Calls Rachel Reeves 'The Klarna Chancellor' After She Splashed The Cash In Spending Review Blow For Rachel Reeves As UK Economy Shrank By 0.3% After Trump Tariffs Rachel Reeves Takes Axe To Whitehall Departments To Pay For Health And Defence Cash Splurge
