Retired NHS workers on six-figure pensions reaches record high
More than 3,000 former health service employees are being paid an annual pension of more than £100,000, up by 64pc compared with a year ago.
Campaigners are now calling on Wes Streeting, the Health Secretary, to overhaul the 'unfunded and gold-plated' NHS pension scheme.
The latest figures from the NHS Business Services Authority (NHSBSA) show the cost of its pensions is now at £12bn per year, with 1.1m former staff qualifying for the retirement payments.
It means there are 47,267 former NHS staff being paid pensions worth more than £50,000 per year, up by 15pc from last year.
Of those, 3,126 are picking up more than £100,000 this year. Last year, the figure stood at 1,909.
A decade ago, the number of former NHS staff with a pension of £50,000 per year or more was just 19,886 and the number getting £100,000 or more was limited to just 285 people.
In the private sector a person would need on average a pension pot of around £3m in order to be able to settle down with an inflation linked six-figure pension income.
Government officials said part of the reason for the rapid rise in the numbers of people with the biggest pensions may be linked to higher inflation.
This is because the pensions are index-linked, meaning the higher the inflation, the more the amount of pension increases the following year.
Higher earning employees within the NHS – typically GPs and consultants – have to contribute 12.5pc of their earnings to be included in the pension scheme.
But for NHS pensions there is no pool of contributions building up over time. The payments are made up from the salary deductions from people currently working in the NHS as well as additional payments to top the scheme up from central government.
Critics of the NHS retirement scheme say its generosity creates a financial time bomb with 2.5m members expecting a pension from it in the future.
John O'Connell, the chief executive of the TaxPayers' Alliance, a campaign group, said: 'There is now an extraordinary elite of NHS retirees who rake in massive pension payments every year, not paid out of retirement pots but instead out of the pockets of working taxpayers.
'That's because NHS employees, like in much of the public sector, get access to gold-plated and unfunded defined benefit schemes which are now almost absent in the private sector.
'As part of his plan to radically reform the NHS Wes Streeting should move all new staff onto fully-funded, defined contribution schemes.'
A Department of Health and Social Care spokesman said: 'The NHS Pension Scheme provides generous retirement benefits for hard-working staff after a lifetime of service, and the scheme was comprehensively reformed in 2015 to ensure the costs are sustainable.
'Staff and employers are required to pay contributions that meet the full cost of the benefits being built up, with higher earners paying proportionately more than other members.'
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