Whoever Andy Burnham appoints to the top jobs in government will inherit not only six-figure salaries, but also one of the UK’s few remaining defined benefit pension schemes - a retirement benefit that offers certainty at a time when most workers are responsible for building their own pension wealth through contributions, investment returns and the fees they pay.
PensionBee analysis shows that if an MP instead saved into a typical defined contribution workplace pension under minimum Auto-Enrolment contribution rates, they could expect to retire with a pension pot of around £195,850 by age 67, assuming they entered Parliament at age 35 with £20,000 already saved. While that’s more than double today's average pension pot of £88,444, it would still not provide the guaranteed lifetime income available through the parliamentary pension scheme.
Maike Currie, VP Personal Finance at PensionBee, comments: “As attention turns to who will occupy the top jobs in government, it’s worth remembering that the financial package extends well beyond salary. Ministers are among the relatively small number of workers who still benefit from a defined benefit pension that provides a guaranteed income in retirement.
“For most people, retirement looks very different. Unlike MPs with a defined benefit pension, the retirement income most of us end up with is largely determined by three decisions: how much we contribute, where our pension is invested and the fees we pay along the way. Helping people make that connection could be one of the biggest steps towards building a nation of engaged investors and improving long-term financial resilience.”
What do ministers earn?
Starting with what Keir Starmer described as “the biggest job in the country”, the Prime Minister receives £169,344 in 2026/27, while Cabinet Ministers receive £166,104, including their ministerial salaries.
From April 2026, MPs receive a basic annual salary of £98,599, which increases annually in line with average public sector earnings, as measured by the Office for National Statistics (ONS).
Cabinet Ministers are entitled to an additional ministerial salary of £72,454, although the amount typically claimed is £67,505, taking total remuneration to £166,104. This applies to several senior government roles, including the Chancellor of the Exchequer, Secretary of State and the Lord Chancellor.
The Prime Minister is entitled to an additional £80,807, although £75,440 is typically claimed, bringing total remuneration to £169,344.
How do MPs’ pensions differ from those of most workers?
MPs belong to the Parliamentary Contributory Pension Fund, a defined benefit pension scheme. Unlike the defined contribution pensions used by most UK workers today, it provides a guaranteed retirement income based on salary and years of service rather than investment performance.
By contrast, most employees build a pension pot through workplace pensions under Auto-Enrolment. The value of those pensions depends on how much is contributed over time and how the underlying investments perform.
The comparison highlights the stark difference between today’s two pension systems. While most workers build retirement savings that depend on contributions and investment returns, MPs continue to benefit from a guaranteed income in retirement.
Maike Currie, VP Personal Finance at PensionBee, added: “The comparison isn’t about suggesting everyone should have the same pension as an MP. It highlights how different retirement looks for most workers today, where outcomes depend on how much you save and how your investments perform.
“The good news is that there are practical steps everyone can take. Checking in on your pension, increasing contributions where you can and combining old pensions can all make a meaningful difference over time. The earlier people recognise that their pension is an investment, not just another deduction on their payslip, the better placed they’ll be for retirement.”
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