Fred “the Shred” Goodwin, the controversial former chief executive of Royal Bank of Scotland, is receiving an estimated £598,000 a year in pension payouts — nearly matching the original sum that caused national outrage following the bank’s near-collapse in 2008.
The figures come as the UK government prepares to offload its final stake in NatWest Group — formerly RBS — potentially this week, bringing to an end a 17-year saga that saw the public rescue the lender with a £45bn bailout during the global financial crisis.
Despite years of efforts to recover the taxpayer-funded investment, the Treasury is expected to post a near-£10bn loss, with projections indicating it may recoup just £35bn from the original rescue.
Although NatWest shares recently rose above 524p — surpassing pre-crisis levels — most government-held shares were acquired at 502p, meaning a significant chunk will be sold at a loss.
Goodwin, once revered as a high-flying banker and later vilified as the face of reckless corporate excess, was forced out as a condition of the state intervention in 2008.
He originally departed with a £16m pension pot, paying an eye-watering £700,000 annually. Following widespread backlash, this was reduced to £342,500 — but inflation-linked increases have quietly lifted it back to nearly £600,000, according to estimates by wealth manager Quilter.
Criticism of Goodwin’s leadership continues to cast a long shadow.
He spearheaded an aggressive expansion strategy, including the disastrous £21bn takeover of ABN Amro and a string of risky acquisitions that left RBS overextended and undercapitalized.
Extravagant spending — from private jets to a £350m HQ in Edinburgh — eroded the bank’s financial stability, contributing to its dramatic fall during the credit crunch.
At its peak under Goodwin, RBS operated in 50 countries with assets totalling £2.2 trillion — more than double the size of the UK economy at the time.
Had the government not intervened, economists feared RBS’s failure could have triggered a cascade of collapses across the British banking sector, jeopardising customer savings and the wider economy.
Now aged 66 and living largely out of the spotlight, Goodwin remains a symbol of banking excess and the ensuing austerity measures that followed.
His pension, funded in part by the same system that endured years of cuts to public services, continues to stoke public resentment as the government prepares to close one of the costliest chapters in UK financial history.
