Unions angry over pension changes

A government report has caused anger among the unions after it called for an end to final salary pension schemes for public sector workers.

Former Labour Cabinet minister Lord Hutton says long-term structural reform is needed to public sector pensions as people are living longer.

He has called for a new model of pensions to be introduced that share the risk more fairly between the Government and workers.

Union leaders are warning that public sector workers won't be happy by the review which they say calls for them to pay more for a less generous pension.

TUC general secretary Brendan Barber said: "Public sector workers are already facing job cuts, a pay freeze and increased workloads as they are expected to do more with less.

"They have already had the value of their pensions cut by the switch to CPI indexing, which will slice a little off their pension every year."

He continued "At a time when inflation is breaking targets and pay is already frozen, asking people to pay immediate increased contributions adds up to a significant pay cut."

Lord Hutton has defended the reports conclusions: "My real focus has been on long-term reforms. We have under-estimated the cost of providing the current range of public sector pensions for years."

The former minister said he was not suggesting taking action against pension rights that have already been built up, arguing that increasing contributions was the "more effective" way forward.