By Marcus Leach
A new flat-rate pension, understood to be worth £155 a week, is to be unveiled on Monday.
At present pensions are means tested and the new flat-rate pension will come into effect in either 2015 or 2016, thus not affecting existing pensioners.
As it stands the current state pension is worth £97.65 a week, with certain top ups ensuring it amounts to at least £132.60. This system will be replaced by a new £140 flat-rate, expected to be pushed up by inflation to £155 buy the time it comes into effect.
"Tomorrow's pensioners do face a very different world," said Pensions Minister Steve Webb.
"They will, on average, be working for a lot longer, they will be retired for longer, they will not on the whole have final salary guaranteed pensions in the way that perhaps their parents did.
"We therefore need a simpler, clearer foundation because more of them will now be asked to save for their retirement."
Work and Pensions Secretary Iain Duncan-Smith has also indicated that the retirement age will rise to 66 for both men and women by 2020, as European law requires the same age for both genders.