The Treasury Chief Secretary, Danny Alexander has announced that an outline agreement has been reached with many of the public sector unions over reforms to public sector pensions.
The new schemes will take effect, if they go ahead, from 2015 and would lead to changes in the pension arrangements for public sector staff in the NHS, local government, education and loc al government.
The Public and Commercial Services (PCS) union, the largest civil service union has not agreed to the outline agreements. Teaching unions, the National Union of Teachers (NUT) and the NASUWT have also said they have not agreed to the new proposals.
Mr Alexander described the amended proposals as the government’s “final position” and urged the unions not to call any more strikes but admitted that these proposals will need to be voted on by the unions and further detailed negotiations were likely.
He said that if the unions agreed to the deal he would guarantee that there would be no more changes to public sector pensions for 25 years.
Mr Alexander, said:"This is a fair deal for public service workers, an affordable deal for the taxpayer, and a good deal for the country."
The proposals mean that public sector employees will have to pay increased contributions averaging 3.2 per cent that will be introduced over three years from 2012. However, the level of increases will be reviewed after the first year to check if the increases lead to a higher drop-out amongst staff paying into pension schemes.
It will also mean that many public sector pension schemes will be changed to career average schemes from final-salary schemes from 2015 and that normal pensions will be paid at the same time as the state pension and mirror the rises in the state pension age.
Compare pensions and take control of your finances.
Free guide: Top ten retirement tips
Twitter: My Finances
Join the conversation at #news_myfinances