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Will the unions sit back and let David Cameron amend public sector pension schemes?

The BBC has today announced plans to close its final salary pension scheme to new entrants and also limit pensionable salary increases to no more than 1% a year. This is the first major public sector operation to announce such a move and many believe that David Cameron will use this as a launchpad to attack public sector pensions which have built up massive deficits which UK taxpayers will need to cover.

It is estimated that final salary pension scheme liabilities in the public sector amount to upwards of £1 trillion and the situation could become much worse before it gets better. Unless the UK government is able to attack this particular area of public funding, and either limit pensionable salaries upon retirement or force members to contribute to the scheme, the £1 trillion deficit at the moment could seem like chicken feed in years to come!

There is no way that the UK unions will allow David Cameron to walk all over the UK pension system in the private sector and we can expect significant friction in the short to medium term. Whether the battles between the government and the unions will be on a par the 1980s and Margaret Thatcher's hardline approach remains to be seen but there is no doubt further conflict and further disputes will be announced in due course.

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