Whitehall staff face the prospect of a second attack on their pension pots – beyond the 3% increase in employee contributions currently sought by the Treasury – under controversial plans outlined in chancellor George Osborne's Budget.

While Mr Osborne confirmed he would press ahead with the planned average 3% hike in public sector staff pension contributions – including a likely rise for local government employees – a technical amendment to the way public pensions accumulate could leave non-council staff facing even higher bills for their retirement plans. Mr Osborne said he would amend the ‘discount rate' on unfunded public pensions – used to calculate the rate at which future benefits accrue – so that it reflected a combined measurement of consumer price index (CPI) inflation plus an estimate of the UK's gross domestic product.