Three-quarters of judges will avoid forthcoming cuts to their pensions, the government has said, as judges who are within 10 years of retirement in April 2012 are excluded from changes to the Judicial Pension Scheme.

Like many other public sector schemes, the generosity of the Judicial Pension Scheme, one of the most generous in the country, is being reduced. The new career average scheme starts in 2015 and will provide lower pensions for new and younger judges, while also abolishing the large lump sums they receive.

Currently judges receive a pension of half their final salary, after a maximum of 20 years of service, plus a lump sum of two and a quarter times their annual pension.

A High Court judge, retiring after 20 years, might therefore earn a pension of £86,500 plus a lump sum of £173,000 after tax. Under the new scheme, this will be cut to £75,000 without the lump sum. Due to the new annual allowance limit of £40,000, these judges would also be charged £11,000 a year while working, for exceeding the limit.

A Circuit Court judge, who retired after 20 years, might now receive a pension of £64,000 a year with a lump sum of £144,000 after tax. In the new scheme this would be £55,000 without the lump sum. They too would have to pay an annual allowance tax charge of around £3,000 a year while employed.

All judges started contributing to their pension for the first time in April 2012, with substantial contribution increases planned for 2013 and 2014. However, in future judges’ pension accrual will not be capped at 20 years, so they will be credited with pension for as many years as they work.

"The new pension arrangements will continue to provide a good way of saving for retirement and the new judicial pension scheme will remain among the most generous in the public sector," Justice Minister Chris Grayling said.

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