Do MPs Get a Pension for Life

Do MPs Get a Pension for Life?

Members of Parliament (MPs) in the United Kingdom are entitled to a pension through a dedicated scheme called the Parliamentary Contributory Pension Scheme (PCPS). This scheme is similar in structure to public sector pensions offered to civil servants, teachers, and NHS staff, though it operates under its own rules.

There has been public interest in how generous MPs’ pensions are, whether they are paid for life, and what happens when an MP leaves office. This article explains the key features of the scheme and includes a section on what happens when MPs lose their seat.

How does the MPs' pension scheme work?

The PCPS is a defined benefit pension scheme, which means pension income is based on an MP’s salary and years of service, rather than investment performance.

Key features of the scheme include:

• MPs must contribute a portion of their salary to the scheme. As of recent years, the standard contribution rate is 11.1 percent of pensionable pay

• The pension builds up at a rate of 1/51st of final pensionable salary per year of service

• The pension is payable from the scheme’s normal pension age, which is currently aligned with the State Pension age

An MP who serves a full parliamentary term of five years would therefore build a pension worth 5/51 of their final salary, adjusted for inflation.

The pension is paid for life once it begins, just like other public service pensions.

Do MPs get a pension for life?

Yes. Once a former MP reaches the scheme’s pension age and begins drawing their pension, it is paid for the rest of their life. Like most public sector pensions, it is also:

• Inflation-linked, so the amount rises each year in line with the cost of living

• Taxable, subject to income tax rules like any other pension income

• Potentially transferable, with a reduced benefit, to a surviving spouse or civil partner after death

MPs cannot access their pension immediately upon leaving Parliament unless they meet the age and service requirements. It is not an automatic payment from the moment they stop serving.

Do MPs get a pension when they lose their seat?

MPs do not get an automatic pension just for being elected once or losing their seat.

To qualify for pension benefits, MPs must:

• Be enrolled in the pension scheme

• Have paid contributions during their time in Parliament

• Meet the minimum age and service conditions to access pension payments

If an MP loses their seat at a general election or by-election, they do not immediately receive a pension unless they are already at pension age. Their benefits are preserved and become payable when they reach the appropriate age.

In addition to pension arrangements, MPs who lose their seat may be eligible for a winding-up payment, sometimes referred to as a resettlement payment. This is intended to help former MPs adjust to the loss of office, particularly if they were not expecting to lose their seat.

The amount is calculated based on age and length of service but is a one-off payment, not a pension.

How much is an MP’s pension worth?

The value of an MP’s pension depends on how long they have served and their salary at the time they leave Parliament. For example:

• An MP earning £86,584 (the standard salary in 2024) who serves for 20 years would build up a pension worth about 20/51 of their final salary, which is approximately £33,945 per year, paid from retirement age

• Shorter service will result in a proportionally lower pension

• Inflation protection and survivor benefits add to the overall value

Pension benefits are limited by lifetime and annual allowances, although these limits have been relaxed in recent years.

Are MPs’ pensions more generous than others?

MPs’ pensions are broadly similar to other public sector defined benefit schemes in terms of structure, though they are sometimes seen as generous because of the faster accrual rate and inflation protection.

It is important to note:

• MPs pay a higher contribution rate than most public sector workers

• The pension only builds while the MP is in office and contributing

• The pension is not paid early unless age and service criteria are met

Final thoughts

MPs do receive a pension for life, but only once they reach pension age and meet the necessary service requirements. They do not automatically receive pension payments when they lose their seat, although they may receive a one-time resettlement payment to help with the transition.

Like other defined benefit pensions, the Parliamentary Contributory Pension Scheme offers a reliable and inflation-linked income based on length of service and salary. While it provides security in retirement, it is not an immediate reward for being elected or for leaving Parliament.