OBR REPORT ESTIMATES PUBLIC SECTOR PENSIONERS SET TO LOSE BILLIONS

Public sector workers will lose more than £8.5 billion a year through cuts to their pensions, according to the latest forecast by the government's official analysts.

Included in the Office for Budget Responsibility's 'Fiscal sustainability report', published today, are figures showing £430 billion will be cut from public sector pensions over the next 50 years.

Treasury minister Danny Alexander is quoted as saying this will "free up" funding for other services, which rather contradicts the prime minister’s claims that the schemes were, "in danger of going broke".

The government-commissioned Hutton report and the National Audit Office had previously confirmed the cost of public sector pensions would fall as a result of changes agreed in 2007.

While costs were forecast to fall from 1.9% to 1.4% of gross domestic product, the OBR now says they will fall to 0.9%.

The Public and Commercial Services union says “this represents a massive transfer of wealth away from public servants.” It will also lead to a greater reliance on means-tested benefits such as council tax benefit, housing benefit and pension credit.