Trade unions reacted angrily today to news that more than 18,000 HSBC staff will have to start paying into their own pensions for the first time. The bank said growing life expectancy is adding significantly to the cost of its final-salary scheme.

It is consulting all 58,000 UK staff, around one-third of whom are in the scheme which closed to new members in 1996. Most are former Midland Bank employees.

HSBC's proposal is that to retain the same final-salary benefits members must start paying 2% of their salary into the scheme from next year, rising to 5% in 2012.

It also wants to raise the scheme retirement age from 60 to 65.

Graham Goddard, deputy general secretary of Unite, said the move would leave HSBC staff "significantly worse off" and push many into "a precarious financial situation". The bank said it is improving the money-purchase or defined contribution scheme used by two-thirds of its staff.

HSBC added that it has recently injected an extra £1.3 billion into the pension pot and raised from 20% to 38% of salary the bank's contribution for final-salary scheme members.

"We need to address a simple reality," said Dyfrig John, deputy chairman and chief executive of HSBC Bank. "People are living longer. Every extra year's life expectancy adds £340 million to the liabilities of our UK scheme."

Most UK High Street banks still have non-contributory schemes but could well follow HSBC's example, according to analysts.