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Pension changes "to cost £67bn"

NHS staff, teachers and civil servants will be left £67bn out of pocket over the next five decades thanks to changes to public service pension schemes introduced in 2007-08, it has been claimed.

The saving was realised for taxpayers by calling for employees to contribute more to their pension plans as well as requiring most of them to work until they reach 65.

It was the first time the system had undergone major reform since the 1970s.

The National Audit Office (NAO) said that the changes were "on course to deliver significant savings and stabilise pension costs around their current levels as a proportion of GDP".

But the spending watchdog stopped short of ruling that the reform provided value for money, as there had been no assessment of the long-term impact of the changes on recruitment, motivation and retention of staff.

The NAO also warned that there was still a risk that the overall cost to taxpayers will be greater as a proportion of national income, if GDP growth permanently underperforms expectations.

The 2007-08 changes affected schemes that account for nearly three-quarters of UK public service pay-as-you-go pension payments, covering more than 2.9 million current employees.

As well as higher contributions and delayed retirement, staff were required to take on more of the risk of extra costs from future pensioners living longer than expected.

Copyright © Press Association 2010

National Audit Office

Your comments (terms and conditions apply):

"This gov see nurses as easy targets and no one can hold them accountable for all the mess they are putting the nurses under. We are human and the gov should not forget that the nurses did not cause any of this mess and we should not be used as their cleaning tools. The nurses' pension is the only thank you they all get for all their years of hard work that very few
appreciate. Well done nurses, retire early and pick up your well deserved pension" - Comfort Renner, London

"I have just taken my pension as I suspected that the new coalition government would make changes to our pension. As I have paid in to my pension for 30 years I decided to go before that stole what I have worked very hard for, to make my retirement comfortable. Shame on the government for doing what I knew they would do!" - Anne St Pier, Essex

"Pulled pension early 08/10 aged 55 yrs, working 15 hrs, as I know many others are contemplating, the pension was the only bonus at the end, recruitment and retention will be awful, they are only worried about targets not caring for people, I have been in NHS since 09/1971, many more have also retired who could have worked longer. NHS does not care about its workers" - A Timmins, Walsall