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MPs could lose final salary pensions

MPs could lose final salary pensions
Published:  8 Jul at 9 AM
Members of Parliament could soon lose their gold-plated pensions as final salary schemes are brought into line with the pensions of other public-sector employees. MPs could also see the age at which they are permitted to draw their pensions rise from 65 to 67 years and then to 68 years.

Senior members of the government and the coalition have reportedly been gathering to discuss the situation ahead of plans by the Independent Parliamentary Authority to recommend a significant increase to MP’s pay packets.

Ipsa chairman, Sir Ian Kennedy, is expected to call for an increase of £10,000 per year. He is also expected to ask for changes to the pension system. However, Prime Minister David Cameron has said he cannot support any increase in the cost of politics, and opposition leader, Ed Miliband, has said the rise in MP’s salaries should be in line with other public-sector workers.

If the changes are introduced then MPs could find themselves with pensions linked to average career earnings. This is a similar system to the one that applies to public-sector employees including civil servants, teachers, NHS staff and local government workers.

According to a Downing Street spokesperson, a period of consultation will follow the pay recommendations made by Ipsa. If necessary, a watchdog will take over to make any final decision.