Royal Bank of Scotland, the part-nationalised bank that controversially gave Sir Fred Goodwin, its former chief executive, a pension pot valued at £16m, is scaling back pension benefits for about 62,500 employees.

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The bank is capping the portion of any salary rise that counts as final pay for pension purposes at 2 per cent or the rate of inflation, whichever is lower. From December, it will also cut the lump sum available to each employee taking early retirement.