Unions representing millions of workers have lost their Court of Appeal battle against a government decision to change the way public sector pension increases are calculated.
Work and pensions secretary Iain Duncan Smith has decision to use the consumer price index (CPI) instead of the, normally faster-rising, retail price index (RPI) to measure price increases influencing pension upgrades.
On Tuesday three appeal judges refused to overturn a High Court ruling last December which backed this approach.
The unions say the CPI route will see the value of pensions cut by up to 20% over a normal retirement, costing every affected worker thousands of pounds.
They accused the government of unlawfully attempting to reduce pension costs in the battle to cut the UK's financial deficit.
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