RBS boss plans to keep huge pension

The former boss of ailing bank RBS has told the Treasury that he plans to hang on to his £700,000 a year pension despite government threats of legal action. Sir Fred Goodwin will receive a massive pension of £693,000 a year, even though the Royal Bank of Scotland has reported record losses of over £24 billion under his leadership.

Both the chancellor, Alistair Darling, and the Prime Minister, Gordon Brown, have said that they would take legal action against the disgraced former banking boss, but Sir Fred has said that he will not give up any of his pension. He said that his pension deal had been agreed with the Treasury when he stepped down as boss of the bank last year, and that ministers had been aware of it.

George Osborne, the shadow chancellor, stated: ‘Even though Alistair Darling said he wasn’t told about Sir Fred Goodwin’s obscene pension pay-off until last week, it now appears his City minister knew last autumn. We urgently need clarification of who knew what and when in Government. If Gordon Brown and Alistair Darling allowed Sir Fred to walk off with £693,000 a year for life of taxpayers’ money, it would be a disgrace.’

Mervyn King, the governor of the Bank of England said that the bonuses and executive pay that banking executives were receiving was a disgrace, stating: ‘It was a form of compensation that rewarded gamblers if they won the gamble but there was no loss if you lost it. It’s obvious that if you do that you will give people incentives to gamble.’