It is the end of gold-plated pensions

Public sector pensioners could be deeply disappointed from 2015 onwards.

Council workers, NHS staff, civil servants and other public sector employees will face the scrapping of final salary schemes if the biggest ever overhaul of public sector pensions is put into place.

Lord Hutton has released new pension proposals according to which gold-plated pension pots will be replaced with ones linked to average career earnings. He also suggested raising the normal age at which public sector staff can retire to the same as the state pension.

About 12 million people depend on a public sector pension and half of them will be affected by these changes if the Treasury accept the reform.

The cost of providing public sector pensions has soared by almost a third in the past decade as people live longer and the Labour peer’s scheme is meant to stop unaffordable pensions within the deepest ever cuts in council spending.

Professional organisations and union would take coordinated actions and the Government would face months of strikes by millions of public sector workers if it implemented Lord Hutton’s proposals.

The Labour peer has however confirmed that despite his proposed scheme, pension entitlements already accumulated will not be affected, giving a generation of public sector employees the chance to retire on gold-plated deals, as the rest of UK faces hard times.