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Ministers to share pensions pain

Senior ministers are facing a £4,000 hike in their pension contributions to show they are sharing the pain with the rest of the public sector.

David Cameron has written to his colleagues, including Chancellor George Osborne, setting out swingeing rises, arguing that they cannot expect low-paid workers like nurses and dinner ladies to "take on a burden we are not prepared to assume for ourselves".

The move comes after hundreds of thousands of people went on strike in protest at controversial reforms to pensions. On average public sector workers face a 3.2% rise in their contributions, as well as having their retirement age pushed back.

But the average increase for ministers will be higher at 4.2%. Under the current scheme they can pay in at 11.9% of ministerial salary, receiving a fortieth for each year of service when they reach the retirement age of 65.

Staged rises over the next three years will see Cabinet ministers contributing 17.9% of their £69,000 pay to get the same benefits - some £4,000 more. Ministers of state will pay an extra 4%, equivalent to £1,320. And junior ministers face 2.5% hikes costing £592.

The Prime Minister himself will be hardest hit with an additional bill of £4,600 per year. Labour leader Ed Miliband will pay an extra 6%. The MPs also face similar downgrades of their Commons pensions in a review being conducted by the Independent Parliamentary Standards Authority (Ipsa).

Although most ministers are said to be ready to accept the effective pay cuts, they are likely to cause resentment among others who do not have substantial fortunes to rely on.

Mr Cameron's memo, seen by the Mail on Sunday, said: "Our pensions are among the most generous in the public services. We cannot expect public service workers, some of whom are very modestly paid, to take on a burden we are not prepared to assume for ourselves."

A Cabinet Office spokesman said: "In November we began a consultation on ministers' pensions which set out a proposed increase of contributions.

"Under the proposals Ministers and Whips will be paying up to 13% in contributions from April 2012, while Cabinet ministers could be paying over 14%. This change will make their contributions amongst the highest in the public sector."

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