The TUC's analysis shows that the average executive can retire at 60 on a final salary pension worth over £3 million, up £300,000 in a year. This is enough to provide a pension of £193,000 a year - more than 25 times the average occupational pension of £7,500 a year and an increase of 15% on the findings of last year's survey. Looking just at the director with the biggest pension in each company, their average pension is worth £5.3 million, up £400,000 in a year. This is enough to pay out a pension of £320,000 - over 42 times more than most staff pensions - and an increase of 10% since last year. The biggest final salary pension pot in the survey tops £21 million - £2 million more than the biggest last year - and would pay the director over £1 million a year. Five directors have a pension pot worth over £12 million.
Key findings show that:
- the proportion of directors with final salary pensions is 79%
- 59% of companies have closed final salary schemes to new staff in recent years
- 38 out of the 49 companies where information is available allow directors to retire on a full pension at 60
- directors' pensions grow twice as fast as the most common rate for employees
- employer contributions to directors' schemes was, on average, the equivalent of around 20% cent of salary, compared to the average of just 5.8% for all employees
- the highest annual employer contribution to a director's defined contribution pension was £988,732.
The gap between the rich and poor has reached levels not seen for more than 40 years. Government statistics show that the richest 10% of the population control more than half the wealth of the country, with the top 1% controlling no less than 21%. In the City, fat-cat pay awards mean that top executives earn 100 times more than their employees. Meanwhile, private equity and hedge funds pay "less tax than a cleaner", according to Nicholas Ferguson, chairman of private-equity and fund management group SVG Capital. Soaring house prices have left hundreds of thousands of households unable to afford decent housing while properties in London regularly change hands for more than a million pounds. The level of social mobility in the UK is among the lowest of any developed nation. For New Labour, the rich are simply reaping the just rewards for enterprise, initiative and investment in the market economy. As for the rest, in another century the slogan might be “Let them eat cake”.
AWTW communications editor