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Judges get let-off from huge pension tax bill

Judges will be exempt from massive tax charges incurred as a result of pre-Budget report changes to how final-salary pension benefits are calculated.

Money Marketing revealed last week that a quarter of a million high-earning final salary pension scheme members could see their tax bill soar.

This is because the Government wants to change the multiple used to calculate the amount accrued to a pension in any given year, and in turn the amount of tax payable, to a factor that increases with age.

But judges will avoid the huge tax bill as, in 2006, the profession’s registered pension scheme was switched to an employer-financed retirement benefits scheme, which is not subject to the new tax, in a bid to get around the lifetime allowance.

Judges contribute only 1.8 per cent of salary into their pension while other high ear-ners in the public sector pay around 8.5 per cent, yet judges get around double the average public sector final-salary pension.

Standard Life head of pensions policy John Lawson says: “We risk alienating valuable public sector workers if they see others escaping scot-free.

“The proportion of tax relief going to high-earners needs to be examined but there are fairer and equally effective ways to do it.”

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Comments

There are 25 comments at the moment, we would love to hear your opinion too.

  1. This is quite simply disgusting. Why should Judges be any different to the rest of us. It was bad enough at A-day when they fiddled with the rules to get around the LTA!

    Who do they think they are??

  2. “We risk alienating valuable public sector workers if they see others escaping scot-free.”

    Dear John, yoohoo!! what about the rest of us (apart from you of course) in the private sector and our clients??

    Is this surreal or what?

  3. Please can we have a statement from them justifying as upholders of UK law’ how they exempt them’selves from it…….again!!

    How can they sit in judgment of others and fine/ imprison them for ‘offences’ that they can personally abuse with no recompence

    Bring back Cromwell

  4. Oh what a surprise how many more tax rises will Judges and MPs be exempt from. This is a joke if I claimed the money they did I’d be taxed to the hilt or locked up or both. Yet they just carru on getting away with it all

  5. martyn llewellyn-smith 4th February 2010 at 4:58 pm

    mmmm. I wonder if the MP’s scheme is much the same as the Judges??? Wonder if they (MP’s) will escape too.

    Justice and Governance to the benefit of the populace? Not a chance, they are all too busy lining their own pockets at the tax payers expense. The Government, Judges, Banks and large Corporations, could it be possible they are all in cahoots? When are the great British public going to wake up? It seems we are happy with thieves and vagabonds running the country. Our forefathers and mothers, must be turning in their graves, I know it makes my stomach churn, how about the rest of you?

  6. I smell a funny handshake or two here.

  7. I could be wrong but I recall Judges and Senior Civil servants and MP’s being exempt from the Lifetime Allowance rules as well – one rule one lot and one rule for another.

  8. Yes PensionMan, what about their escape from Equitable Life while we had our hands tied by the FSA?

    The system is corrupt, regulation is bust, politics is bust, UKPLC is bust.

    We’re doooomed Cap’n Mainwearing….

    “Corruption has never been mandatory”.

    Anthony Eden

  9. I am hopping mad at this stupid government and the FSA and the rest of the politicans. cant trust any one of them!! Its alright for me JACK attitude gets this country no where.

  10. Like MPs, judges appear to have lost sight of the fact that they are public servants. By setting themselves above us they have lost our respect and the moral authority to pass judgement on us.

  11. I suppose Blair & Brown need a “get out of jail free” card.

  12. You simply could’nt make it up.

    I just despair where we are going.

  13. At school, nearly fifty years ago, I was taught Abraham Lincolns speech, the one beginning ‘Four score and seven years ago our Fathers brought forth upon this continent……………………’ At the end of this he gave what our headmaster suggested was an excellent definition of ‘democracy’, ‘Government of the people, by the people and for the people’.
    I believe we are a long way from this ideal, especially from the ‘BY the people and FOR the people’ bit.

  14. So why were judges ever treated better than everyone else? Didn’t the government realise that in the eyes of the Law everyone is equal?
    It is an absolute disgrace.
    Don’t forget that the oldest and arguably strongest and most influential trade union in the world was The Law Society. DISGUSTING.

  15. Two tier country, two tier economy, two tier society roll on the election 2010 and the revolution

  16. @John Harding. Just in case you hadn’t noticed Limeys are Subjects not Citizens. Until the Monarchy is removed don’t get upset when your betters put their snouts deeper in the trough.
    Come the revolution it will all be different ?

  17. I may be wrong, but I was under the impression, and have been for many years, that the judicary and MP were exempt from any of the pensions laws. They have never been affected by such things as pension cap, or the changes in accruement rules! Doesn’t one day as Prime Minister entitle you to maximum pension based on your final salary?

    If I am right, this means others are finally waking up.

  18. All people are equal but some people are more equal than others. George Orwell got it right, One day we can also look forward to a democracy, for and on behalf of the people…..

  19. It’s an EFRB so the 1.8% is out of post tax earnings and the whole of the pension is taxed – no tax-free lump sum – so T(E)T as opposed to EET- of a registered pension scheme.

  20. I think that all these comments are, perhaps understandably, being made from ignorance.
    Most judges have given up very lucrative practices as barristers, taken substantial pay cuts, and usually have about 15 years on the bench. Providing reasonable pensions is actually deferring what would otherwise be a substantial immediate cost to the Home Office in vastly increased salaries.
    Please be careful what you wish for.

  21. The elite have always looked after each other throughout history this is just a continuation of one small piece of the jigsaw. It is just that we can see little pieces now and again.
    This Government is as corrupt as most others and supports other corrupt governments all around the world with our money. There is little we can do about it and they know it.

  22. john - please stop and think 5th February 2010 at 2:07 pm

    Some people are ranting on here just because they always do. An eFRBS isn’t caught by the new tax regime. Perhaps this is a good thing for our clients as it is something that those above 130k may want to use in April 2011, when the tax really hits

  23. I found Helen Pow’s article of the 4th February concerning Judges’ Pensions to be somewhat unbalanced and unfair on Judges’. Some of the above comments I’m afraid display a compete lack of knowledge of the situation.

    First of all let us get the facts right. Whichever way you want to cut it, the so called ‘Pension’ that Judges’ receive for their occupation is not actually a Pension and isn’t counted as such. I know that this is semantics but it was done for a particular reason after A day.

    As you might imagine, Judges are not selected from the lists at the local employment exchange but are chosen from the very best that jurisprudence has to offer, whether that’s a first rate solicitor or an excellent QC is neither here nor there. What is germane is that these people in their private practices have earned anything up to and even over £1million a year. That they were persuaded or wished to sit on the bench was in part as a matter of “pro bono publico”. Before A Day and any of the Pension changes that we had recently, the quid pro quo for attracting a judge who was going to loose enormous amounts of income by giving up his own practice was that:

    a) They would be offered the best possible Pension and
    b) To crown a life time’s expertise and inviolable independence they might also be honoured.

    To compare this with other segments in any other walk of life is unfair. The big cheeses in the civil service have gradually climbed the greasy pole, but they have never given up large amounts of money to enter public service. I am sure that John Lawson is more than well aware of this and has probably misquoted and wasn’t referring to Judges in particular.

    Judges always have been, and will continue to be, a special case.

  24. Loads of ill-informed, knee-jerk reaction here. The Judicial scheme was switched to an EFRBs in 2006 after an assessment of the impact of the LTA. The reasons were outlined to and agreed by Government at the time. This latest headline is not a new or additional concession – EFRBs have never been subject to pensions regulations but this penny appears to be dropping slowly with some of the contributors.

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