Millions of public sector workers and civil servants today won their fight to retain the right to retire at 60. 

Talks between the government and union leaders of 3 million civil servants, health and education workers have ended in agreement over pensions. 

Unions had been threatening the biggest strike in this country for decades because of government plans to increase the pension age of public sector workers from 60 to 65. 

Under the deal, which will have to be ratified by the leaders of several unions, existing workers in the civil service, health and education will be able to retain their existing pension arrangements. 

Workers who join these public sectors will now normally retire at 65, but will have the option to pay more into their pension scheme to retire at 60. 
Brendan Barber, the general secretary of the TUC, hailed the deal following talks with a number of government ministers today led by the trade and industry secretary, Alan Johnson. 

"This is a major breakthrough that public service unions have secured," Mr Barber said. 

"This is a real change of heart by the government. The guarantees we have been given were simply not there before. 

"We have managed to persuade the government that they needed to think again." 

Separate negotiations are continuing over the pension arrangements for more than 1 million local authority workers. 

Mr Barber said unions wanted to see the same protection given to council staff as the deal agreed today. 

The Public and Commercial Services Union, which represents hundreds of civil servants, said the agreement was "a fantastic achievement". 

Its general secretary, Mark Serwotka said: "The deal has been agreed against a backdrop of the government trying to impose these changes." 

A Unison official said: "We welcome the agreement but this is only part of the jigsaw. We would expect the principles agreed today to apply to the local government scheme." 

Mr Barber said that the government had accepted that public sector staff need suffer no detriment in their pensions arrangements. "This has met the major union objective. 

He added: "On top of this, the government has given important guarantees for the future. All new public pensions schemes will be based on defined benefits, linked to earnings and index-linked. 

"All public service workers will continue to be able to retire at 60 - if that is their wish - into the future. Detailed negotiations will now need to take place in each of the sectors covered by the agreement. 

"We now need to see the same progress made in local government." 
For the government, Mr Johnson said: "The good news that we are living longer means pensions have to adapt. It's been happening in the private sector and today's agreement means it will happen in the public sector as well. 

"We should give people flexibility about when they choose to retire, but it's vital that we retain the experience and expertise that older workers have to offer and don't force them into premature retirement at 60. 

"Today's deal means that public sector workers will continue to get good quality pensions which are defined benefit, but like the state pension and pensions in the private sector, the normal pension age for new entrants will now be 65. 

"Just like most private sector pension reforms, the pension provision of existing scheme members will be protected. Individual scheme negotiations will now agree how this reform will apply to existing employees and what other changes are made. 

"All sides have worked hard to reach an agreement. A transparent exchange of information has allowed a shared understanding of the challenge and enabled progress to be made. This is a sensible step forward, achieved through proper negotiations, which puts public sector pensions on a sound financial footing.