GORDON BROWN will retire on a state pension that would require an investment of at least £1 million in the private sector, according to figures released yesterday.

It is more than the pension provision made by Lord Turner of Ecchinswell, the chairman of the Pensions Commission, which is due to report today on Britain’s pensions crisis.

Calculations by the Liberal Democrats show that the investment needed to pay the Chancellor’s pension would rocket by a further £2.13 million if he became prime minister, even for a day.

In four years, at age 59, the Chancellor will be eligible for a £36,934 annual index-linked pension for serving the required 26 years and eight months as a Member of Parliament. Leading the country would immediately entitle him to an additional index-linked annual pension of £62,418.

The Prudential, one of Britain’s leading annuities providers, would require a payment of £3.13 million to provide a pension that big.

Lord Turner, however, insists that his own pensions savings are worth less than £1 million despite a high-flying business career. The former McKinsey consultant and head of the CBI has admitted that he missed his chance to join a final salary pension scheme.

During his four years at the CBI, Lord Turner, who is a vice-chairman of Merrill Lynch, the bank, opted instead for a defined contribution scheme that does not promise to pay out a set amount. He said: “I’ve had two periods in life when I earned serious money: at McKinsey and Merrill Lynch. But consultancy and investment banking don’t give big pensions. You choose how much you put in. The jobs were very well paid but the money came in non-pensionable bonuses at the end of the year.”

Pensioners’ groups said yesterday that the large sum required to buy Mr Brown’s pension drew attention to the retirement crisis facing most workers, who are due to retire with pension savings that average £20,000.

Neil Churchill, a director of Age Concern, said: “The poorest have done pretty well under this Government but people on modest or average incomes are anxious about whether they will have enough to get a decent retirement income.

“These figures illustrate the difference between public and private sector pensions and it’s vital that politicians, who can look forward to quite comfortable retirement incomes, understand the worries of workers.”

Francis Fernandes, actuarial head at ABN Amro, the bank, calculated that someone starting out on £17,000 a year at 20 would have to pay about a quarter of their salary into a pension savings plan each year for the next 40 years to get a retirement income close to £62,000 a year.

“An additional inflation-proofed pension of £62,000 per annum would be the stuff of dreams for most people,” Mr Fernandes said.

Lord Oakeshott of Seagrove Bay, the Liberal Democrat pensions spokesman in the House of Lords, wrote to the Chancellor yesterday to ask if he would agree to give up his prime ministerial pension if he became leader.

“Pension affordability starts at the top,” Lord Oakeshott said. “Will you lead by example?” A spokesman for the Treasury said that he would not discuss Mr Brown’s pension but that the Lib Dems would receive an answer to their letter “in due course”.

• More than 6,000 British Gas engineers in the GMB union are to stage a series of one-day strikes before Christmas and into the new year, leaving broken boilers unrepaired and heating systems unserviced, in a dispute over plans to close their final salary scheme to new employees.

  They could also be joined by several hundred other engineers who are members of the T&G.

  The GMB said that the engineers will carry out emergency work for vulnerable households including the elderly and those with young children. The union says that British Gas is reneging on a deal reached two years ago when the engineers voted to pay an extra 1 per cent contribution and keep the scheme open.

Times Recommends

• Swine flu vaccine for all as drug rushed through
• Artificial sperm and the race to build a baby
• BBC jets out stars to tout for prizes