BBC faces £1.7bn bill to foot huge pension packages paid to top stars and directors - limiting investment in programmes

The BBC is facing a £1.7bn bill to cover the costs of hefty pensions it hands to its top stars and executives. (Photo: AFP via Getty Images) The BBC is facing a £1.7bn bill to cover the costs of hefty pensions it hands to its top stars and executives. (Photo: AFP via Getty Images)
The BBC is facing a £1.7bn bill to cover the costs of hefty pensions it hands to its top stars and executives. (Photo: AFP via Getty Images) | AFP via Getty Images
The BBC is facing a £1.7bn bill to cover the costs of hefty pensions it hands to its top stars and executives - limiting investment into its programmes

The BBC has handed out hefty pensions to its top stars and executives with it now facing a £1.7 billion bill, limiting its investment into programming. Documents seen by the Telegraph revealed that the BBC said its pension bill is “not justifiable” and the corporation “cannot expect the government to require licence fee payers to pay more to cover the cost of pensions”.

The corporation is in a financial crisis, locked in a legal battle as it tries to reduce its pension payouts. From March 2022 to the end of 2028, the broadcaster plans to pay a total of £1.7 billion to help balance the books  – a cost of around £70 for every licence fee payer.

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BBC employees who joined before 2010 were offered retirement packages which rise in line with inflation and allow retirement at 60, six years before the state pension age. A BBC employee in the scheme could be entitled to two-thirds of their final salary when they reach retirement.

Nearly 7,000 staff are still paying into the old pension scheme at the BBC and it has been closed to new joiners since 2010. But it has become so expensive that it now makes up more than 80 per cent of the broadcaster’s spending on retirement benefits, despite covering fewer than 40 per cent of its staff.

The Telegraph found that the cost of funding the pensions is now equivalent to almost half the salaries of those staff.  The broadcaster is fighting a legal battle to reduce the costs of the scheme and has appealed against a High Court ruling that blocked it from reinterpreting the benefits of 6,800 staff still saving into it. It was granted permission to appeal in September and the hearing is expected to take place next year.

The BBC is facing a £1.7bn bill to cover the costs of hefty pensions it hands to its top stars and executives. (Photo: AFP via Getty Images) The BBC is facing a £1.7bn bill to cover the costs of hefty pensions it hands to its top stars and executives. (Photo: AFP via Getty Images)
The BBC is facing a £1.7bn bill to cover the costs of hefty pensions it hands to its top stars and executives. (Photo: AFP via Getty Images) | AFP via Getty Images

Its benefit pension scheme funds the retirement of former BBC veterans including directors such as George Entwistle,who resigned in the wake of the Jimmy Savile sex abuse scandal. It also includes current stars who joined before 2010 such as Laura Kuenssberg and Sir David Attenborough.

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Over the past two decades the BBC has faced controversy over soaring salaries paid to stars and top executives. In 2021 The Times reported that half of the BBC’s top executive team had been given pay rises of up to 40% as the corporation cut jobs. Its annual report this year showed that the salaries of the eight highest paid executives at the all went up from the year 2021/2022. Director General Tim Davie‘s salary for the last year was £525,000, up from the £494,000 he received in 2021/22. These pay packages are now ramping up the cost of staff pensions and plunging the broadcaster into financial difficulty.

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