Most people will end up with less money in retirement under new state pension proposals, a leading think tank has warned.
The Institute for Fiscal Studies said that the Government's proposals for a flat rate £144 a week state pension "imply a cut in pension entitlements for most people in the long run".
Even part-time workers and women who take time off to care for children, who many assumed would be beneficiaries of the changes, will end up with a lower amount of money under the new system than under the old one.
"The main effect in the long run will be to reduce pensions for the vast majority of people, while increasing rights for some particular groups most notably the self-employed," said Rowena Crawford, at the IFS.
Under the new rules, A flat rate weekly pension will be introduced worth £144 (£7,488 a year) in today's money, although after inflation it will probably be worth around £155 by the time it starts in April 2017. This compares with the current state pension, which is £107.45 a week.
However, second pension and other top-up arrangements will be removed under the reforms. These other arrangements include the state second pension, the state earnings-related pension and graduated pension. This means that many people who contributed to these top-up arrangements will end up worse off.
People will have to make 35 years of National Insurance Contributions to get the full flat-rate pension. The minimum pension will be £41 a week, but you will have to work for ten years to accrue even that. Currently you can build up state pension from just a year.
Taking a career break to a raise family will be counted towards the 35 years of NI contributions needed for a full state pension, following the changes. Ms Crawford at the IFS, said the proposals were "a welcome simplification"
"There will be a fairly complex pattern of winners and losers from the reform in the short-term the main effect in the long run will be to reduce pensions for the vast majority of people," she said.
She added that workers should be wary of ministers' claims that this will be the final radical reform of state pensions.
Similar claims were also made for the reforms announced in 1998, 2002 and 2006. "Such frequency of reform makes it harder for individuals to plan for retirement appropriately," she said.