HSBC is rejigging pension arrangements for its UK staff in a move that will leave 18,500 long-servers worse off but will benefit 40,000 staff who have joined the bank since 1996.

Staff in the old defined benefit scheme, which was closed to new recruits 12 years ago, will have to make pension contributions for the first time or agree to have their future benefits clock up at a slower rate. HSBC also plans to raise the retirement age from 60 to 65.

The bank is increasing its contributions for staff in the defined contribution scheme from 0-8 per cent of salary to 8-13 per cent. It said that this would cost it an extra £54 million a year.

Two-tier pension systems, which are common in many companies, have produced growing resentment because defined contribution schemes are regarded as inferior, usually providing smaller pensions.

Dyfrig John, the deputy chairman of HSBC, said that the changes were designed to help the bank to attract and retain the best talent. On watering down the defined benefit scheme, he said: “We need to address a simple reality. People are living longer.” Someone retiring in 2025 could expect to live a decade longer than someone retiring in 1980, he said.

Graham Goddard, deputy general secretary of Unite, the trade union representing some HSBC staff, said that the proposals were a slap in the face for long-serving employees and that HSBC was “robbing Peter to pay Paul”. The financial justification was thin from a bank that made profits of £13 billion last year, he said.

HSBC has recently been paying contributions equivalent to 37 per cent of defined benefit members’ salaries into the scheme.

HSBC’s defined benefit scheme is one of the biggest in the private sector, with 104,000 members and assets of £10.5 billion. The changes do not affect the 30,000 pensioners and 57,000 deferred members of the scheme.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive