HONDA is attempting to raise the retirement age for workers at its British plant from 60 to 62 in an effort to stave off a financial crisis in its stricken pension fund.

The Japanese carmaker is thought to be the first major employer in Britain to try to raise the age at which workers are eligible to retire. The move comes as the company embarks on its first pay talks with unions since it began making cars in Britain 17 years ago.

Honda wants to raise the retirement age to bolster its pension fund which has a deficit of more than £40 million. The group is also closing its final salary pension scheme to new entrants — at least for the next five years — and is calling for employees to increase their pension contributions.

Honda also wants to impose a 2.2 per cent pay rise on staff at a time when many companies in the sector are agreeing pay deals above inflation.

The firm was forced into a new round of pay talks with unions after agreeing a recognition deal with Amicus, the largest private-sector union, earlier this year. A previous deal, which included a no-strike clause and fewer negotiating rights, was torn up by Derek Simpson, the new joint general secretary of Amicus, in a purge on so-called “sweetheart deals” when he defeated his predecessor, Sir Ken Jackson.

Mr Simpson said that Honda’s 4,000 workers at its Swindon plant should reject the plans. He said: “While we appreciate that the company is trying to shore up the scheme we don’t believe in prolonging people’s working lives. We won’t be recommending that turkeys vote for Christmas.”

Honda has written to its staff asking them to sign new contracts to enable the leaving age to be raised by two years. Staff aged over 55 will not be affected. The carmaker has said that it will put £10.2 million into the pension fund and increase company contributions by more than 2 percentage points to 9.5 per cent. It will also ask employees to raise contributions to 5.5 per cent from 5 per cent.

Amicus argues that increased pension contributions amount to a pay cut for employees, given that the overall pay offer is below inflation. Mr Simpson said: “This is another example of the victim of a pensions problem being asked to pay the price rather than the perpetrator. We want the Government to take action to give pensions the same status as pay.”

Honda also faces confrontation with its workforce over its insistence that selective merit awards should remain part of the pay package.

The carmaker wants to give a 2.2 per cent pay increase, with a further 0.5 per cent of the wage bill available for merit awards. Amicus objects to this because it believes the extra money should be shared among everyone.

Jim d’Avila, regional secretary of Amicus, said: “This is a poor offer compared with settlements which have been reached at Jaguar, Land Rover and BMW.”

The stand-off between the two sides could be referred to Acas, the conciliation service, by the end of the month.

Honda declined to comment on the impasse, saying only: “Honda is currently in its annual pay review process. That pay review continues.”