Public sector workers face pension curbs

PUBLIC sector workers will have to work until they are 65 or have their pensions cut under recommendations expected to be made by Lord Hutton this week.

He will also say that public sector workers should pay thousands more into their pensions and be switched out of “final salary” schemes.

Instead a “career average” sum will be worked out, helping to offset the bias towards an elite minority. However, he will not recommend a pension cap for the highest earners.

Pension contributions will increase by an average of three per cent from 2012 as part of a broader shake-up of retirement funds.

Hutton’s interim findings last October highlighted the need for public sector staff to work longer hours and pay higher contributions.

It is thought the report will call for a mechanism to review any new legislation to deal with increasing life-expectancy.