Bank of England governor Mervyn King is entitled to a £5.4m pension pot worth nearly £200,000 a year when he retires, bigger than the many bankers’ pensions he has criticised during the financial crisis.
The bank’s annual report, published yesterday, said King will be entitled to a package worth £198,200 a year when he retires, a 10% increase since last year. The cash value of the pension package required for King’s retirement increased by £521,000 to £5,356,500.
Although the governor refused to accept a salary increase of up to £100,000 a year proposed by consultants, the report has revealed he currently earns an annual salary of £295,498, plus a further £1,320 in benefits – a rise of 2.5% on last year’s pay packet.
He said “astronomic” pay and bonuses had led to a culture of recklessness in the City, which had spawned the banking crisis.
The bank’s report also said the firm employed 6% more staff in the year to February 2009 to meet demand. Some 1,666 staff were on permanent contracts, up from 1,579 as at the end of February 2008.
The report said: “The increase in staff numbers was due to the extra workload brought on by the bank’s new responsibilities. In addition, many staff were temporarily reassigned during the year to work on policy initiatives.”
The report added that “in recognition of the exceptional workload” put on staff, the bank increased its bonus and special payments budget from the usual 7% of salaries to 8.1%.
In his forward in the report, King said: “The bank has always played a vital role at the heart of our economy and financial system. Never has that been more apparent. The significant challenges it has faced in the past year have meant a vast increase in workload formany bank staff and I am immensely grateful to them all for their extraordinary efforts.”