Cabinet to pay 2.4% pension rise

David CameronThe Prime Minister and members of his Cabinet will pay an extra 2.4% in pension contributions from next month with dozens of junior frontbenchers also facing an increase in the amount they pay towards their retirement.

The change was announced by Cabinet Office minister Francis Maude who said it was appropriate his Government colleagues faced similar hikes in pension contributions to other public servants.
Under the reforms, secretaries of state in the Commons will pay an extra £1,652 a year in contributions.

David Cameron, who opted not to receive the generous retirement handout usually received by holders of his office, will face an increase in contributions of £1,842.

The ministerial salary used to calculate the pension increase is on top of the £65,738 pay received by Mr Cameron and his colleagues as MPs.

Ministers of state will see contributions increase by 1.6% and junior ministers will pay an extra 1%.

There will also be a 2.4% increase in contributions for Labour leader Ed Miliband.

In a written statement Mr Maude told Parliament: "In the spending review 2010, the Government announced its intention to increase employee contributions in public service pension schemes.

"This followed on from Lord Hutton's interim report on public service pensions which concluded there was a clear rationale for public servants to make a greater contribution if their pensions were to remain fair to taxpayers and employees and affordable for the country.

"The ministerial pension scheme was not covered by Lord Hutton's recommendations, but I consider it appropriate that its members face similar changes."

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