HSBC will decide within the next six weeks whether to press ahead with controversial changes to its pension arrangements in what could trigger a damaging clash with unions, thought to be poised to reject the bank's plans.

HSBC, the UK's biggest financial services group, has proposed several landmark changes to its pension schemes. It also plans to increase the retirement age for its UK staff from 60 to 65.

It is asking the 18,500 members of its final salary scheme to make contributions for the first time or settle for a longer wait for their retirement benefits to accrue.

The bank has offered to increase its payments to a second, defined contribution scheme, from up to 6 per cent to a maximum of 13 per cent of staff pay. Employees would put in up to 5 per cent of their salary.

About 40,000 working bank staff pay into this scheme and the additional contributions will cost HSBC £54 million a year.

As well as trying to address the increased cost of staff living longer, HSBC is trying to make its newer scheme more attractive and address concerns it is running a “two-tier” pension system. The bank's more generous final salary scheme was shut to new joiners in 1996.

It emerged earlier this week that BT, the telecoms giant that operates one of the UK's biggest retirement funds, is also considering increasing the staff retirement age to 65 as part of an overhaul designed to shore up the scheme's strength.

HSBC, which first tabled the proposals in June, finished a consultation over its proposals at the end of September.

An HSBC spokesman said yesterday that the bank would decide on what changes to introduce by the end of the year, having discussed the matter with scheme trustees and unions.

HSBC's final salary scheme has 104,000 members and assets of £10.5 billion. A total of 87,000 pensioners and deferred members would be unaffected by any changes.

However, Unite, the banking union, said it had yet to agree to any modifications. A spokesman said proposals and counter-proposals had been exchanged during the consultation process.

Unite was waiting to see what the trustees recommended before balloting its members on whether they would accept the plan, he said.

"We're holding fire; we're waiting to see what the trustees say," he said.

At the time the proposals were first mooted, Unite described them as a slap in the face for long-standing employees of the bank.

Graham Goddard, Unite's deputy general secretary, said HSBC was "robbing Peter to pay Paul".

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