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Low-paid private sector workers will be the worst-hit as 20million people lose out in a Tory pensions shake-up, experts have claimed.

Shocking analysis says those on less than £15,000 a year will be badly affected as perks introduced under Labour are axed.

Chancellor George Osborne is launching a "simpler and fairer" £155.65-a-week flat rate pension this April in the biggest shake-up for 40 years.

But although that's much higher than today's £115.95 basic rate, it will no longer sit alongside top-ups called the additional state pension.

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The secondary system gives OAPs up to £164.36 a week depending on their salary and what they've paid in - and Gordon Brown ensured those on less than £15,000 benefited from it.

There is also confusion over how much of the flat rate will be given to workers who previously "contracted out" of the additional state pension.

Chris Noon, a partner at pensions consultancy Hymans Robertson, claimed 20million people would lose out under the changes - far more than the tax credit cuts George Osborne scrapped amid an outcry.

(Image: Getty Images)

He told the Mirror: "The numbers are consistent with what we've been saying for the last 3 years.

"The Government is focusing its analysis on individuals retiring in the very near term and avoiding any comment on the long-term impact of the changes.

"Pensions saving requires a long-term horizon and not making the millions of people who are going to be worse off aware of the impact is at best a serious oversight.

"There are two things going on.

"The Government is looking to spend up to 0.6% of GDP less on State pensions by 2060.

"And the Government is redistributing its spend on State pensions and is giving more to the self-employed and employees in the Public Sector - £1,000 to £2,000 per annum per person.

"The cost of this lower spend and the impact of this massive redistribution is borne by private sector employed individuals.

"Within this community it's the lower paid, those earning less that £15,000 a year, who currently earn State pension at the most rapid rate thanks to changes that Gordon Brown made.

"They will be the biggest proportionate contributors to the cost savings and cost redistribution."

The Department for Work and Pensions' own research(above) shows more than 70% of people who retire in 2030 will have better outcomes than under the current system.

But that declines to around 65% for those retiring in 2040, 55% in 2050 and just under 45% in 2060.

(Image: PA)

The stark warning comes as a former pensions minister warns George Osborne is set to axe a perk that helps millions of savers escape tax.

Ex-Lib Dem MP Steve Webb said tax relief reforms will ditch pensioners' ability to withdraw 25% of their pension as a lump sum tax free.

He wrote in the Sunday Times: "Given that the break costs the chancellor around £4bn per year in lost revenue, it is easy to see why he might like to get rid of it."

Responding to the claims by Hymans Robertson, Pensions Minister Ros Altmann said "70% to 75%" of people would be better off under the new system.

A Department for Work and Pensions spokesman said: "Millions stand to gain from the changes to the State Pension, including women and the self-employed who so often lost out in the past.

"The new State Pension will provide a sustainable system for future generations who will also benefit from workplace pension savings throughout their careers."

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