Are taxpayers expected to bankroll Whitehall’s million-pound pension promises forever?

The real scandal is that these pensions aren’t backed by proper savings or investments. They sit inside an unfunded system that will simply push the bill onto future taxpayers.

New TaxPayers’ Alliance research into Whitehall’s “mandarin millionaires” reveals that 20 of the most senior civil servants now hold combined pension entitlements worth £27.8 million – an average of £1.39 million each. Fourteen have built up pensions worth more than £1 million; of these five are sitting on pots in excess of £2 million.

At the very top is Sir Matthew Rycroft, the former Permanent Secretary at the Home Office, whose pension pot is worth £2.51 million. Close behind is Sir Chris Wormald, the Cabinet Secretary and head of the civil service, with a £2.49 million pot. Both men are in line to receive £122,500 a year for life – almost double the average accrued annual pension of £70,500 among their senior colleagues, and almost four times the median private sector salary.

Half of Whitehall’s permanent secretaries can also expect a hefty taxpayer-funded lump sum. David Williams at the Ministry of Defence is due £237,500, while Treasury mandarin James Bowler is in line for £202,500.

Again, the issue is not that senior officials receive good pensions. The issue is that these pensions are paid for on a “promise now, pay later” basis. The civil service scheme is part of a wider £1.3 trillion public sector pensions liability, with no real fund behind it. There is no investment pot growing in the background, no assets being built up over time. Instead, future governments will have to cover the costs through higher taxes, more borrowing, or both.

That is a ticking time bomb for the public finances.

The timing of this revelation is particularly uncomfortable for ministers. Rachel Reeves is preparing a Budget that could see new restrictions and raids on private pensions – targeting salary sacrifice schemes, cutting tax relief, or capping the tax-free lump sum people can take when they retire. Millions of private sector workers are once again being told to save more, get less, and pay more for the privilege.

Meanwhile, Whitehall’s top brass remain protected by gold-plated, inflation-linked, defined benefit schemes that are insulated from market risk and economic reality.

This is not about scapegoating civil servants. It is about honesty and sustainability. At the very least, future public sector pension accruals should be moved to a fully funded, defined contribution model, the same system used by most private sector workers. Real money should be set aside, real costs should be visible, and real limits should exist.

Because until the government gets serious about its unfunded pension liabilities, every lecture about “tough choices” and “sound money” is nothing more than theatre. And the people who will eventually pay for it – today’s and tomorrow’s taxpayers – are entitled to ask why the rules only seem to apply to them.

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Darwin Friend is the Research Director at the TaxPayers' Alliance

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