By Rosa Prince
Millions of public sector workers are facing a steep rise in their pension contributions in order to help pay down Britain’s record deficit, The Daily Telegraph has learned.
Nurses, teachers, council workers, civil servants and police officers will be expected to pay hundreds or even thousands of pounds more each year into their pension pots, as the era of early retirement on generous payments is brought to an end.
A new government commission, led by John Hutton, the former Labour defence secretary, could recommend that public sector staff begin paying more towards their retirement as early as next spring. The move would save taxpayers billions of pounds a year.
George Osborne, the Chancellor, said on Sunday that the disparity between public and private sector pensions was “unsustainable” when the country was entering an age of austerity. Britain was heading down “the road to ruin” without urgent action to cut the national debt, he said.
Mr Hutton is to examine how to bring state employee pensions in line with the private sector. The Chancellor also hinted that a freeze in public sector pay, to be announced in Tuesday's emergency Budget, could last for more than the year that had been expected.
His approach risks a confrontation with trade unions, who last night warned of industrial action if public sector staff were forced to bear the brunt of Government spending cuts.
Mr Osborne also risked a rift within the new Coalition, as Liberal Democrat backbenchers said that they could not support cuts to welfare budgets.