At Least 50 Times Worse Than Maxwell: The Great Royal Mail Pension Scandal

The Robert Maxwell pension scandal was one of the worst financial betrayals in British history, with the media mogul siphoning off hundreds of millions from his employees’ pension funds. But what if we told you that the government has pulled off something far worse—leaving taxpayers to foot a colossal bill of £45bn? That’s exactly what happened with the Royal Mail pension scheme, and the numbers are shocking.

How Did This Happen?

In 2012, the coalition government took over Royal Mail’s pension fund ahead of privatisation. The scheme held £29bn in assets—money meant to pay postal workers their hard-earned retirement income. But instead of safeguarding the funds, the government spent them. Gone. Wiped out. Now, there’s no money left, and taxpayers are forced to cover the pension payments at a staggering cost of £4m a day.

A Legacy of Mismanagement

Unlike Maxwell’s blatant theft, this wasn’t a one-man heist. This was a calculated policy decision by successive governments, quietly shifting the burden of a once-funded scheme onto future generations. Over the past decade, taxpayers have already paid out £16.5bn to keep Royal Mail pensioners afloat, and with another £28.7bn still to be covered, there’s no end in sight.

Here’s the painful reality:

• 204,000 retirees are currently receiving payments, with another 145,000 still in the system.
• Annual costs have ballooned from £1.2bn in 2012-13 to £1.7bn this year.
• Unlike a traditional pension scheme, no investments are being made—everything comes straight from taxpayers.

Maxwell vs. The Government: Who’s Worse?

Let’s put this into perspective. Robert Maxwell’s pension fraud is estimated to have cost around £400m-£800m. The Royal Mail pension disaster? It’s 50 times bigger. The key difference? When Maxwell’s crimes were exposed, they led to regulatory reforms and criminal investigations. When the government squandered £29bn of postal workers’ pensions, they got away with it—without consequence.

According to economist Neil Record: “The Government promised index-linked pensions to a large group of employees, then took the £29bn that sat in the pension fund and spent it.” The result? A fresh £50bn liability dumped onto taxpayers, purely to make Royal Mail a more attractive sell-off for privatisation.

A Crisis Hidden in Plain Sight

Most people are completely unaware of this scandal. Why? Because it didn’t happen overnight. It was a slow-motion train wreck, masked by political spin and financial sleight of hand. But make no mistake—this is one of the largest pension scandals in British history, and it will continue draining public funds for decades.

Meanwhile, Royal Mail—now fully privatised—is in the middle of a takeover bid from billionaire Daniel Kretinsky. The company’s pension scheme for current workers, set up after privatisation, is in surplus. So while private investors benefit, the public continues to pay for the pensions of those who built the company in the first place.

What Needs to Happen?

This mess was created by government decisions, and it’s the government that needs to answer for it. At a time when taxpayers are already feeling the squeeze, the idea of pouring billions into a pension scheme that should have been self-sustaining is unacceptable.

So here’s the big question: if this were a private company, would we let them get away with it? If this were Maxwell, would there be outrage? The answer is obvious. And yet, when it’s the government making reckless financial decisions, the public is expected to accept it without question.

It’s time for transparency. It’s time for accountability. And it’s time we stop letting governments treat pension funds like their own personal piggy banks.