11 hours ago
The gold-plated pensions costing taxpayers £400m a year
Taxpayers are spending more than £400m a year on gold-plated pensions for just 10,600 judges, new analysis shows.
The average member of the Judicial Pension Scheme now receives £37,000 in pension contributions for each year of work, before being handed almost £40,000 a year in retirement.
They have built up £4.5bn in taxpayer-funded pension entitlements, but pay up to 7pc towards the cost of their retirements.
The figures come despite major reforms to public sector pensions in 2015 after rising costs pushed the Government to act.
The Taxpayers' Alliance said judges should be moved into defined contribution schemes, while the Intergenerational Foundation said the 'profligate pension promises' would be funded by young people.
There were 10,578 members of the Judicial Pension Scheme at the end of 2023-24, according to a Freedom of Information request made by The Telegraph.
Judicial salaries ranged from £106,563 to £312,510 during the year, according to the Ministry of Justice. As public sector workers, they are entitled to guaranteed, inflation-linked pensions for life.
The scheme's 6,162 working judges paid in 4.1pc of their salary on average. As their employer, the Ministry of Justice then added another 51.1pc at a cost of £229m.
The required employer contribution increased to 62.6pc from April last year to keep pace with the rising costs of the scheme, but the amount paid in by employees has remained the same.
Before 2012, judges did not have to contribute to their personal pensions and only paid towards benefits for their dependants.
The scheme's pension payouts are also more generous than other key public sector schemes, with retirees receiving £39,400 on average – costing taxpayers another £180m a year, taking the total bill to £409m.
By comparison, the average pension was around £16,600 for teachers and £12,300 for Armed Forces personnel, falling to £11,400 for NHS workers and £9,900 for retired civil servants.
Liz Emerson, of the Intergenerational Foundation, said: 'Younger generations can only dream of similar pensions, but they will end up paying for these profligate promises via higher taxation, later retirements and lower pensions themselves.
'At the very least, the Government should levy National Insurance contributions on annual pensions that are higher than the average earnings of working-age adults.'
Public sector pensions already cost the UK £54.3bn a year, despite being moved away from final salary schemes in 2015 amid fears they had become unaffordable.
Payments are now based on a worker's average earnings, but the final salary entitlement for existing members was extended to 2022 after a legal challenge from members of the judicial and firefighters' pension schemes.
Under the new system, judges have 2.5pc of their salary added to their pension each year, which is more than teachers, civil servants, NHS workers and Armed Forces personnel.
John O'Connell, of the TaxPayers' Alliance, said: ' Public sector pensions are extraordinarily generous with employer contributions, often outstripping those in the private sector.
'But what makes them particularly generous is the fact that they are gold-plated schemes, not based on the value of a pension pot, but on the average earnings of the employee, meaning they get topped up above and beyond what has already been contributed.
'On top of this, they are unfunded, coming not from an investment scheme, but general taxation. At the very least, ministers should be moving all public sector workers onto fully-funded, defined contribution schemes which are based on monies actually paid in.'
A report published last year by the University College London Judicial Institute revealed that more than one in three judges planned to quit the profession within five years, citing poor working conditions and a continual loss of net earnings amid a backlog in the country's courts.
The Senior Salaries Review body recommended a 4.75pc pay rise for members of the judiciary for 2025-26, but the Lord Chancellor reduced it to 4pc.
A Ministry of Justice spokesman said: 'The Judicial Pension Scheme 2022 is designed to encourage top legal professionals to become judges who are vital to keeping the justice system running.'
