Government to increase retirement age and axe final salary pensions

The government has laid out plans to increase the retirement age for public sector employees and replace final salary pensions with career average schemes. The chief secretary to the Treasury, Danny Alexander, has confirmed that the age at which public sector workers will be able to draw their pensions will rise to 66 by 2020, in line with changes to the private sector retirement age. Staff in the public sector will be moved to career average schemes, as suggested by Lord Hutton in his review of public sector pensions earlier this year, although benefits accrued under existing final salary schemes will be protected. Pension contributions will …