MPs’ pay and pensions to be reformed

From 2015, MPs will receive pay linked to average earnings, as well as a pension scheme that is on a par with other parts of the public sector.

The Independent Parliamentary Standards Authority (IPSA) published its decisions on reforming MPs’ pay and pensions following proposals previously announced in a consultation that ran until 20 October.

Its package of reform includes:

  • A one-off uplift in salary to £74,000 in 2015, an increase of 9.26%, to address the historic shortfall. Thereafter, MPs’ pay will be linked to average earnings; if they go up, so will MPs’. If they do not, neither will MPs’ salaries.
  • A new pension scheme that is on a par with those in other parts of the public sector. Following the consultation on IPSA’s proposals earlier in 2013, it has decided to increase MPs’ pension contributions further, reducing the cost to the taxpayer.
  • A tighter regime of business costs and expenses, including ending the provision for evening meals.

IPSA is obliged by statute to review its determination on MPs’ pay in the first year of each Parliament, and will review the decisions on MPs’ pay following the 2015 election before implementing these. 

Ian Kennedy, chair of IPSA, said the reforms would set MPs’ pay on a sustainable footing for a generation when implemented after the 2015 general election.

He added: “For the first time, MPs’ pay and pensions will be set independently, and away from political deals cooked up in Westminster.

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“We are sweeping away the out-of-date and overly generous benefits, and introducing a one-off uplift in pay. Crucially, thereafter MPs’ pay will be linked to everyone elses’.

“We have designed these reforms so they do not cost the taxpayer a penny more. When taken with the tens of millions we have saved by reforming the business cost and expenses regime, we have saved the taxpayer more than £35 million with the changes we have introduced since 2010.”