By Claire West

Ahead of Lord Hutton's interim report on public sector pensions, Unite, Britain's biggest union, warned that reducing the quality of public sector pensions will only serve to increase inequality in society, hitting women the hardest.

70% of staff working in the public sector are women, they already face pay freezes and cuts in benefits, any increase in pension contributions will put even greater pressure on personafinances. Unite has evidence that low paid women are opting out of pension schemes as they cannot afford to make pension contributions in the short term. It's a problem that will get worse if employee contributions are increased.

Public sector workers have already agreed to accept changes in their contributions and benefits. Unite's submission to The Hutton Review has made it clear that public sector pensions are affordable in its current form.

Unite assistant general secretary, Gail Cartmail said:

"The evidence shows that decent occupational pensions reduce inequality in society. A race to the bottom will be a betrayal of fairness and lead to the deterioration of pension provision for working people across the board.

"Eroding the quality of public sector pensions will hit women the hardest. Many women may have no choice but to vote with their feet and opt out of pension schemes altogether or even leave the public sector.

"Pressures like pay freezes and cuts in benefits both imposed by this government will make it harder to make ends meet. Short term necessity will trump long term security as the government's short sighted austerity measures bite.

"Unite's submission to The Hutton Review has made it clear that public sector pensions are affordable in its current form. The increasing gap between public sector and private sector pensions is because private provision has got much worse.

"The hysteria over public sector pensions has been whipped up by the coalition Government, private sector employers and pension industry experts. They have not hesitated to manipulate the facts to make a case for attacking public servants."

Recent data from the ONS shows that occupational pensions have substantially reduced the proportion of elderly households living in poverty since the early 1990s. But the data also highlights growing income inequality in retirement between the top 20 per cent of earners with incomes four times that of those in the bottom 20 per cent.