Public sector pensions remain one of the government’s largest long-term liabilities, reaching £1.3 trillion in 2023-24.[1] The civil service operates an ‘unfunded’ pension scheme, accounting for £208 billion, or 16 per cent of this total, with only the NHS and teachers’ schemes being larger. While ‘funded’ pension arrangements see employees set aside assets which are disbursed in the future, these ‘unfunded’ pensions rely on future taxation or borrowing to cover the costs of employee benefits.
In 2025, median gross pay for public sector workers was 8 per cent higher than in the private sector.[2] Meanwhile, analysis by the Institute for Fiscal Studies found that in 2021, 47 per cent of public sector employees received an employer pension contribution of at least 20 per cent, a benefit obtained by only 2 per cent of private sector workers.[3] For the civil service, employer contribution rates have been set at 28.97 per cent from 2024-25 to 2026-27.[4] This comes alongside additional benefits of regular promotion, salary rises and job security which should be sufficient recompense for a career in the civil service rather than leaving private sector employees to subsidise unfunded generosity for their public sector counterparts.
Civil service pensions should operate on a funded, defined contribution scheme, like most of the private sector, instead of the generous defined benefit model currently used. This will ensure private sector taxpayers on less generous schemes are not left subsidising unfunded generosity for their public sector counterparts.
This note shows the pension pots of senior civil servants who led Whitehall government departments in 2024-25, detailing the annual pension they’ll receive, as well as lump sum payments they’ll be entitled to upon retirement. The scale of these awards shows the size of unfunded pension liabilities being built up by senior civil servants.
READ THE FULL RESEARCH PAPER
Key findings
- In 2024-25, 22 leading civil servants who run UK government departments had an average pension pot of £1,389,500.[5] Of these, 14 had pension pots worth more than £1 million and 5 in excess of £2 million. Combined, these pension pots were worth £27,790,000.
- Matthew Rycroft, former permanent secretary at the Home Office, had the largest pension pot worth £2,510,000 in 2024-25.
- The average annual pension upon retirement will be £70,500. This is more than double the median gross private sector salary in 2025 (£32,376).[6]
- Chris Wormald, cabinet secretary and head of the civil service, and Matthew Rycroft, former permanent secretary at the Home Office, have the largest accrued annual pensions in 2024-25 at £122,500 each. A further three will have over £90,000 in accrued annual pensions.
- Of the 22 senior civil servants 9 will receive a lump sum upon retirement as of 2024-25. The average value of this is £159,167.
- David Williams, permanent undersecretary of state at the Ministry of Defence, will have the largest lump sum upon retirement at £237,500.
READ THE FULL RESEARCH PAPER
[1] HM Treasury, Whole of Government Accounts 2023-24, 2025, p.251.
[2] Office for National Statistics, Earnings and hours worked, public and private sector: ASHE Table 13.7a, 23 October 2025, www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/datasets/publicandprivatesectorashetable13 (accessed 10 November 2025).
[3] Boileau, B. et al., Public spending, pay and pensions: Green Budget 2022 – Chapter 4, Institute for Fiscal Studies, 8 October 2022, p.34.
[4] Civil Service Pensions, Employer Contribution Rates, 26 November 2024, www.civilservicepensionscheme.org.uk/employers/employer-responsibilities/employer-contribution-rates, (accessed 20 October 2025).
[5] Excludes two permanent secretaries who removed themselves from the civil service pension scheme.
[6] Office for National Statistics, Earnings and hours worked, public and private sector: ASHE Table 13.7a, 23 October 2025, www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/datasets/publicandprivatesectorashetable13 (accessed 10 November 2025).