Police fury as pension lump sums cut by nearly 5 per cent under new rules

Police officers across England and Wales have reacted angrily after new pension regulations reduced retirement lump sum payments by close to five per cent.

The changes came into effect on May 22 and affect officers retiring under the 1987 Police Pension Scheme.

Under the revised calculations, officers retiring now are receiving substantially lower lump sum payments than colleagues who left the force days earlier despite giving up the same level of monthly pension income.

The 1987 Pension Scheme is a final salary arrangement covering officers who joined the police service before April 2006.

The scheme allows members to exchange part of their annual pension payments for an upfront tax-free lump sum at retirement.

Labour altered the calculation formula following updated economic forecasts, suggesting future pension costs would be lower than previously expected.

Police Federation national chairman John Partington criticised the changes and accused ministers of unfairly targeting retiring officers.

Mr Partington said: "After decades of service, the 'thanks' retiring officers get is this: Government quietly shaving cash off a hard-earned retirement overnight."

He added: "It's a blatant case of picking the pockets of police pensioners, and we will not let it stand."

The Police Federation, which represents rank-and-file officers, said it is now seeking legal advice over the scope and justification for the changes.

The organisation is also examining whether officers who had already received pension quotations before May 22 may have grounds for legal action.

Former pensions minister Steve Webb, now a partner at consultancy LCP, acknowledged pension schemes do occasionally revise lump sum calculation methods.

Mr Webb said: "It cannot be good practice to change these figures with little or no notice."

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He added: "The Government should reconsider whether these changes should be deferred, especially in cases where people are about to retire and have already received pension quotations."

Illustrative calculations published by the National Police Chiefs' Council showed the scale of the reductions facing retiring officers.

Under previous calculations, an officer retiring at the age of 50 could have expected a lump sum payment of around £174,850 before tax.

Under the revised formula, the same officer would now receive approximately £166,075.

The National Police Chiefs' Council said younger officers and those in senior ranks could face even larger reductions.

The council also confirmed that retirement projections issued from May 21 onwards may have contained inaccurate figures.

A spokesman for the National Police Chiefs' Council said the organisation recognised the challenges the changes created for officers making retirement decisions.

The spokesman confirmed discussions were continuing with the Home Office to clarify the implications of the revised calculations and ensure consistent communication with affected officers.

The Home Office defended the changes and said pension factor reviews were standard practice.

A Home Office spokesman said: "Police officers perform an extraordinary and selfless duty, and we are committed to providing them with high-quality pensions.

"Reviews of pension scheme factors are common practice, and the law is clear that any change determined by the scheme actuary must be implemented immediately."

Members of the 1987 Police Pension Scheme contribute 11 per cent of their salary towards their pension benefits, which are generally calculated using final salary earnings.

Police officers in the United Kingdom have been banned from taking strike action since 1919, although civilian police staff are still permitted to strike.

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