Taxpayers ‘could be left with £250m bill for pension move’

The Fire Brigades’ Union, which is planning an industrial action ballot over increases in pension contributions, said the increase was “self-defeating” and warned it could lead to one in four firefighters leaving the scheme.

The pension scheme relies heavily on money coming in from contributions, so any reduction would result in immediate financial losses, it said, adding that an actuaries report had found that a one in four drop out rate could cost taxpayers £84m a year for the next three years.

A survey of almost 8,000 firefighters for the FBU , which has 43,000 members, showed that 27 per cent were considering opting out of the main pension scheme because of planned increases in contributions, which the union said would cost members thousands of pounds a year.

FBU general secretary Matt Wrack said: “The plans for a big contribution hike are self-defeating and could result in huge costs to the taxpayer. A sharp hike in already high contributions could be the tipping point which will see an exodus from the main pension scheme.

“The perverse outcome of Chancellor George Osborne’s dash for savings will be large losses. The viability of the scheme will be badly undermined, costing even more in the long-term.

“Incomes have been hammered by pay freezes and big rises in household budgets so people are looking at where to make savings. The Treasury needs to think again and not take a massive gamble with firefighter pensions and taxpayer money.”

Its warnings come as thousands of lecturers and other academic staff at the country’s leading universities launch a “sustained campaign” of industrial action over pensions.

Members of the University and College Union (UCU) in 67 universities, including Cambridge, Oxford, London School of Economics, Manchester, Liverpool and Leeds, will only work contracted hours, refuse to cover for colleagues and will not attend meetings.

The union warned the action could escalate into strikes if the row is not resolved, adding that a million students could be affected.

The dispute centres on the universities superannuation scheme (USS), one of the largest private schemes in the UK.

Around 40,000 UCU members are affected, with the union saying changes introduced at the start of the month will see them paying more to work longer, with less protection if they lose their job.