How safe is your pension?

We don't all have the security in retirement that Sir Fred Goodwin is assured of. So what pension safeguards are there for we mere mortals? Tim Bennett investigates.

Had Royal Bank of Scotland been allowed to fail, says the BBC, Sir Fred Goodwin's defined benefit pension estimated to be worth £703,000 a year would have been replaced by nearer £20,000 from the Pension Protection Fund (see below). Luckily for Sir Fred, the government bailed out RBS. But what pension safeguards are there for the rest of us?

If a 100% secure pension is your priority, get a job in the public sector. The government still offers defined benefit pensions where the amount paid out each year is a fixed proportion of your final salary. As the ex-head of pensions at Boots, John Ralfe, points out, this commitment could cost taxpayers more than £750bn. Nonetheless, a scheme that will pay Gordon Brown's pension is highly unlikely ever to be allowed to fail.

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Tim graduated with a history degree from Cambridge University in 1989 and, after a year of travelling, joined the financial services firm Ernst and Young in 1990, qualifying as a chartered accountant in 1994.

He then moved into financial markets training, designing and running a variety of courses at graduate level and beyond for a range of organisations including the Securities and Investment Institute and UBS. He joined MoneyWeek in 2007.