Nine Ministers in twelve years shows a fundamental Government disdain of savers and pensioners

Save Our Savers asks you to join us and voice your frustration with Government disdain towards savers and pensioners demonstrated by their having been 9 Pension Secretaries of State in 12 years. A Minister must need at least 6 months to master the pensions brief and a minimum of 18 months to develop policies that encourage the savers and savings culture.

What makes the perfect pensions secretary is a bit of a poser.

Acuity, ambition and ardour? Not too much: James Purnell ticked all these boxes and scored very highly on trust with both consumers and the industry until his vaulting distaste for Gordon Brown’s leadership saw him resign in summer 2009.

What about steadfastness and status as ‘a safe pair of hands’ instead? Step forward John Hutton who deftly steered forward the controversial plans for the new semi-compulsory Personal Accounts pension plans due to launch in just two years.

However, he only endured a year and a half at the helm which might not sound like much…but it makes him the third most long-serving pensions secretary since Labour came to power in 1997.

In fact, in the 15 months to Hutton’s arrival, there had been a staggering THREE pension secretaries including Alan Johnson – a magnificent nine months before a General Election and reshuffle got in the way – and David Blunkett’s jaw-droppingly small six-month tenure thanks to a little local difficulty with rules on taking on directorships while a minister.

And that’s not forgetting Peter Hain’s seven-month stint in charge from summer 2007, that ended in ignominy after funds for his deputy leadership campaign became embroiled in a police matter.

But then that’s the problem with pensions secretaries (nine have held the post since Labour came to power in 1997): politics gets in the way.

So the probable answer to the pensions puzzle is the one that we can’t have: permanence.

There is shamefully no real long-term job involving careful policy consideration, nurture of savings continuity and consensus of opinion from providers and consumer bodies on longevity, steadfast returns and security.

Instead ordinary savers must shoulder this lack of guidance, with no reward.

Yet… there is a reward for those fortunate pensions secretaries for their (usually very short-lived) labour: a very fine final salary pension.

Rustling up a quick calculation, cabinet ministers have been entitled to a salary of £144,520 (including an MP’s salary of £64,766) from 1 April 2009.

Now let’s assume the pensions secretary lasted just one year in the job – pretty good going by previous experience – what could they expect?

Luckily for MPs, their final salary scheme is unlike nearly every other pension in the country. Rather than put their retirement savings at the risk of the stock markets, they can rely on a generous ‘1/40th’ final salary scheme.

Which means that for every year in their post, they’ll receive one-fortieth of their final salary when they stop working.

On this formula, a 12-month stint as pensions secretary earns them a remarkable annual retirement sum of £3,613. And if they manage just two years unbroken service? A whopping £7,226 a year. Even just six months at the wheel grants a yearly £1,807 when they retire.

For an ordinary worker to secure even a pension of £1,807 a year, they’d currently need a pension pot built up over a lifetime of at least £45,000 in order to generate the same inflation-proofed monthly sum.

Given that this target is way more than the average pension pot (hovering at around £27,500), it’s no wonder ministers and MPs stand accused of standing aloof from ordinary workers’ pension woes.

Sam Dunn is a freelance consumer journalist who writes on all aspects of personal finance for national news websites, newspapers and magazines. A former Personal Finance editor of The Independent on Sunday, he was named ABI Freelance Financial Journalist of the Year in 2008. In 2006, won the Headlinemoney Consumer Journalist of the Year award and in 2005, scooped the Harold Wincott Foundation Personal Finance Journalist of the Year honour.

Image (C) PA