The government will have to make changes to pension schemes across the public sector after a Supreme Court ruling found reforms made to firefighter’s pensions in 2015 were discriminatory.
In a statement yesterday, Treasury secretary Elizabeth Truss confirmed that on the back of the ruling against the 2015 changes, under which workers 10 years from retirement were protected from reforms and younger workers moved to less generous pensions, the government will have to remedy the policy across the rest of the public sector.
This will include pensions spanning the NHS, civil service, local government, teachers, police, armed forces and judiciary.
Quilter estimates this will cost this will incur a multi-billion pound bill for the government.
Quilter head of retirement policy Jon Greer says: “As the two remaining Tory party candidates battle it out for the final week they are pledging anything that will win over party members, including to fix the NHS pensions allowance crisis if they are brought to power. This is, however, a pension issue that may pale into insignificance compared to the £4bn a year public sector funding gap they need to plug thanks to a monumental mistake presided over by the coalition government.
“Arguably this will feel like a bigger pensions headache for the new prime minister than the tapered annual allowance relative to the NHS. But perversely at the same time there is a risk the judgement exacerbates that issue if senior NHS staff are awarded compensation.”