Bank of England boosts its gold-plated pensions

BOSSES at the Bank of England boosted their taxpayer-funded pension scheme while overseeing a money-printing push that wiped billions off ordinary savers’ pensions.

The amount the Bank pays into its gold-plated final salary scheme has doubled since 2011.

It now puts in the equivalent of 54 per cent of each member’s pensionable salary – around eight times higher than most FTSE 250 companies – and has eliminated its funding black hole .

But it comes as schemes in the private sector face an unprecedented squeeze – partly due to actions by the Bank.

Figures released yesterday by the Pension Protection Fund show the 5,945 major schemes it oversees had a combined deficit of £459.4billion at the end of August – up from £376.8billion in July.

In an attempt to head off a downturn after Brexit, the Bank added £60billion to the quantitative easing programme that has been underway since the financial risis. The programme uses newly-printed money to buy govern-

‘No interest in how others are coping’

ment bonds such as UK gilts. The cash is then meant to find its way into businesses, and ultimately the pockets of consumers.

But this has the side-effect of increasing demand for the bonds, making them more expensive. As prices rise, the yield – the value of income the bonds provide – comes down, meaning they make their holders less money.

This is a major problem for pension funds as gilts are a stable source of long-term income in which they tend to be very heavily invested.

Yesterday the yield from tenyear gilts was around 0.85 per cent – close to all-time lows. It comes after the Royal Mail last month told its 90,000-strong workforce their final pension scheme was unaffordable and faced the axe.

Labour MP Chris Leslie said: ‘It is very tin-eared of the Bank ... to solve its own in-house scheme without showing interest in how other schemes are coping.’

EXPERTS differ over whether it was necessary for the Bank of England to rush through emergency measures to boost the economy after the Brexit vote.

But on one point there can be no dispute: Governor Mark Carney’s hasty decision to slash interest rates and embark on yet another round of money-printing has piled on the misery for private pensionscheme members and other savers.

Indeed, the Pension Protection Fund revealed yesterday that the schemes it oversees – whose ability to make money has been devastated by low interest rates – had a terrifying combined deficit of £459.4billion at the end of August, up more than £80billion in a single month.

But it’s a different story at the Bank itself. Like so many other public bodies, it has filled the black hole in its employees’ gold-plated pension scheme with massive injections of public cash.

With their policies destroying private savings, why should Bank staff be protected, at public expense, from the consequences of their own decisions?

Isn’t the pensions apartheid between the public and private sectors among the most divisive social ills of our age?