§ Mr. Rookerasked the Prime Minister if she will make a statement outlining how the pension payable to former Prime Ministers is funded, detailing what part contributions play, how it takes account of length of service and cost of living changes and if it is based on salary as approved by the House.
§ The Prime MinisterFormer Prime Ministers are awarded immediate non-contributory pensions, on leaving office, under section 26 of the Parliamentary and other Pensions Act 1972. Irrespective of the length of service, the amount of pension is 15/40ths of the Prime Minister's full salary as approved by both Houses of Parliament. The pensions are not funded in advance, but are paid directly out of the Consolidated Fund. They are increased annually in line with increases in the cost of living but may not exceed the amount that would be paid to the current Prime Minister if he or she were to leave office.
On assuming office, Prime Ministers cease to belong to the parliamentary pension scheme. They lose all the pension rights accrued to date, and the contributions they have paid become refundable with interest, and are repaid to them when they leave office.
The pensions of former Prime Ministers are withheld at any time while they draw a salary from public funds other than that paid to them as Members of Parliament.