Public sector unions today raised the prospect of a pre-election spring of discontent which could see more than two million public sector workers take industrial action in protest at government reform of their pensions.
Millions of council and health workers and other public sector staff such as teachers and firefighters face having to pay more to fund pension schemes or lose benefits if they retire due to ill health, union officials believe.
Fears will increase in the next few days with an expected announcement about the government's proposals for the civil service pension scheme. All public sector unions will meet later this month, when some officials will press for coordinated industrial action, including a one-day strike.
The final-salary pension scheme looks set to be replaced by one that will pay a "career average" pension on retirement, which will be lower than the current arrangement.
Under the existing scheme, pensions are based on the best year of the last three years of service. For each year served, staff get one eightieth of their final salary. So someone who had served 40 years would get half their salary on retirement.
Under the new scheme, which will affect anyone under 50, pensions will be calculated on average salary earned throughout a career.
A consultation paper to be published by the cabinet office minister, Ruth Kelly, will also raise the mandatory retirement age for civil servants from 60 to 65. Both proposals will be introduced for new entrants in 2006 and for all officials by 2013.
A Cabinet spokesman said public sector pension schemes need to remain "affordable and sustainable".
"People are living longer and pensions are getting more expensive, " he said. "To maintain the long-term affordability of our pension scheme, the government announced in its green paper on pensions that the pension age would rise from 60 to 65."
Mark Serwotka, general secretary of the Public and Commercial Services Union, called for "a coordinated response from public sector unions in the form of a one-day strike, unless the government is prepared to think again".
Unison general secretary, Dave Prentis, said the proposed changes to public sector pension schemes would mean increased contributions and reduced benefits.
"Members working in the NHS or for local government have never had high pay or city bonuses, but they could look forward to a decent pension - now all that is being taken away," he said.
"What really riles me is the breathtaking hypocrisy of MPs who recently voted themselves the best pension scheme in Europe, but say they can't afford it for anyone else. This is a position that Unison cannot accept and will oppose. It will lead to conflict between Unison and the government, if not this year then next."
The Fire Brigades Union said the government was proposing to cut ill health retirement arrangements for firefighters, and was planning other measures to cut the cost of the industry's pension scheme.
A strike by all public sector workers would be the biggest walkout in the UK since the 1979 Winter of Discontent and cause the government a major headache in the run-up to the general election, widely expected to be held next May.
The looming threat of industrial action comes as the TUC today holds a conference highlighting the distinctive problems faced by women "shortchanged" by the current pension system, which sees their average retirement income lag to just half that of men.
