The government’s plans to increases the payments made by public sector workers into their pension pots have been condemned by Unions, which claim these changes amounted to a ‘significant’ pay cut.

According the Unions, the move would leave 6 million nurses, teachers and council workers worse off it retirement. One union leader warned it would lead to ‘French-style’ street protests.

The suggested increase in payments has come about following an inquiry by former Labour minister, Lord Hutton. His recommendations include; raising the retirement age for public employees in the longer term and ending the ‘inherently unfair’ final salary schemes. In addition, Lord Hutton proposed that workers should immediately pay more into their pension schemes to ease the £32bn annual burden on the public purse. Other findings in the report include:

• The lowest paid workers should be protected
• Some public sector schemes date back 200 years and are now out of step with the 21st century
• Many people now spend 40% of their life in retirement
• Final salary schemes are unsustainable and should be replaced with average salary programmes
• The government is wrong to describe public sector pensions as ‘gold-plated’ as the average is only £7,800 a year.

George Osborne will now have to decide how much more nurses, teachers, civil servants and council workers will have to pay, with a decision expected in the comprehensive spending review, to be published on 20 October.