In an interview with The Times at the weekend, MP Michael Fabricant answered the question: “What’s better for retirement – property or pension?” with “Property. I’ve made a bit of money on my London flat”. Two questions for Mr Fabricant. First, how does he intend both to live in and live off his flat? And second, has he ever looked at his pension? Fabricant has been an MP since 1992. He has built up 26 years’ worth of pension entitlement, which should mean that he retires on an inflation-linked pension of not far off £50,000 a year (I can’t be exact here, as he could have made one of a variety of contribution choices).

To buy a similar income on the open market would cost not far off £2m. You can buy a one-bedroom flat in Westminster for £2m if you really try, but most still cost under £1m. So while Fabricant might have made a bit of money on his London flat, we can be pretty sure he hasn’t made an MP’s pension-worth on it. Not by a long shot.

Still, the key point here is that Fabricant aside, lots of public-sector workers are starting to grasp just how much more generous their pensions are than everyone else’s – and how that means they are starting to breach the new allowance system. The current lifetime allowance (LTA) is £1.055m. Have more than that in your pension fund (a defined-benefit pension is valued at 20 times the income from it for these purposes) and you pay an extra tax when you draw down. So £50,000 a year brings you close.

Read more @Money Week