Hutton calls for changes to public sector pensions

Increased longevity means current schemes are "not tenable in the long run."

Public sector pensions should be linked to average career salaries rather than final salaries, according to Lord Hutton's pension report.

His independent review of public service pensions argued that the changes, which would be implemented in 2015, would make pension schemes "sustainable and affordable in the future" as life expectancy rises.

The new career average schemes would mean lower pensions for public sector workers unless they work longer to make up the difference.

The report recommended that the normal pension age (NPA) should be raised from 60 to 65 to bring it in line with the state pension age. The NPA and state pension would then increase simultaneously in future.

Lord Hutton stressed that the changes would be fairer to "the majority of members that do not have the high salary growth rewarded in final-salary schemes."

He said that current schemes were "not tenable in the long run," but the move has been criticised by trade unions.

Dave Prentis, general secretary of the Unison union, told the BBC that the recommendation "brings the threat of industrial action closer."

Lord Hutton was commissioned to carry out the review by the coalition government after it was elected last year.

His initial report, published in October, found that longer life expectancy meant that pension schemes were becoming too expensive. He also recommended that public servants should make higher contributions in future.