Call to cap public sector pensions

Pensions for public sector workers should be capped at around £50,000 a year, a senior Labour backbencher suggested today.

With salaries for the best-paid executives in the civil service and local government soaring in recent years to as much as £250,000 a year, pension entitlements have risen in some cases to "excessive" levels, said Terry Rooney, the chairman of the House of Commons Work and Pensions Committee.

His proposal of a cap could prove controversial, with unions representing senior public servants likely to resist any restriction on pensions.

Mr Rooney told BBC Radio 4's Today programme: "Some people who are earning £200-£250,000 a year can see a pension in the range of £150,000.

"I think most people would think that that was excessive.

"Perhaps there should be a cap of, say, somewhere around £50,000."

The "gold-plated" pensions available in the public sector have become increasingly controversial as a growing number of private sector companies have closed down their generous final-salary schemes and moved staff onto more risky schemes linked to the stock market.

And a recent report suggested that the total taxpayer liability for future public sector pensions may be higher than £1 trillion.