Budget: Osborne scraps councils’ final salary pensions

Local authority social care workers will have to work longer and will lose their entitlement to a pension based on their final salary, chancellor George Osborne (pictured) confirmed in today's Budget statement.

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Local authority social care workers will have to work longer and will lose their entitlement to a pension based on their final salary, chancellor George Osborne confirmed in today’s Budget statement.

Osborne has accepted the recommendations of Lord Hutton’s review of public sector pensions, published on 15 March, which advised scrapping final salary pensions.

Hutton said local authority staff should instead receive a pension based on their average career earnings.

However, he insisted that the government must honour in full pension promises accrued by current public sector pension scheme members, maintaining their link to final salary.

Osborne also accepted Hutton’s recommendation to bring the retirement age for all council workers into line with the state pension age, which will rise to 66 in 2020 and to 68 by 2046.

Ministers are to start consulting public sector workers and trade unions on the pensions reforms, with the final proposals to be set out in the autumn.

The Budget document said the proposals would be “affordable, sustainable and fair to both the public sector workforce and taxpayers”.

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