Ministers unveil new pensions con

Pensions Minister Steve Webb claimed the coalition's latest pensions shake-up would create a "single, simple and decent state pension."

But workers will have to pay more in contributions over a longer period for less money after they finish work.

Ministers boasted that it would give a million private-sector workers and five million public-sector staff an extra £1.30 a week.

But these same workers will have to pay more in National Insurance for the measly rise that Unison said would leave people living "well below the poverty line."

Currently pensioners who have paid National Insurance contributions for 30 years receive around £150 a week through a full basic pension and state second pension.

The new flat-rate pension will see workers pay contributions for 35 years and get just £144.

Unison assistant general secretary Karen Jennings said simplifying the "confusing" pension system would be good but the Treasury would be the real winner here.

"Who will be worse or better off following these changes will depend on salary growth, which remains stagnant for many workers, including millions in the public sector, and inflation, which continues to eat at the income of low-earners," she said.

Unite assistant general secretary Gail Cartmail added that the government has given "no indication" that there is more money available for the state pension.

"If the government wants to improve the state pension of those who fare worst at present then it should be financed out of progressive taxation, not by reducing the modest state benefits of average earners who have a full career," she said.

Prime Minister David Cameron took to television in a desperate attempt to flog the government's announcement.

He insisted the proposals were "fair" and would "help a lot of women and a lot of lower-paid workers."

However the National Pensions Convention (NPC) said that would be true - if millions of existing pensions were not excluded from the new deal.

The NPC estimates that almost two million pensioners, most of them women, who are eligible for the means-tested Pension Credit do not claim it because it's too complicated.

NPC general secretary Dot Gibson said the pension plan just "adds insult to injury to millions who have already made a contribution to our society but are still living in poverty.

"The outlook for future generations of pensioners is even worse.

"They are being asked to pay an extra five years' worth of National Insurance contributions, work longer before they can retire and end up with less than they can get today," she added.