Following the release of the Government's White Paper on pension reform last week, GERRAN GRIMSHAW looks into what the plans mean, and who will be the winners and losers.

IT is one of the most contentious and far-reaching reforms of recent years.

The long-awaited White Paper laying out the Government's plans for pensions in the 21st century received a mainly critical reception upon publication.

But now that the dust has settled we asked leading figures who would benefit from the proposed reforms.

The biggest winners from the plans will be those people aged between 47 and 59, who are working now. They will benefit from the boost to state pensions resulting from the restoration of the link with average earnings in 2012, but will not have to work beyond 65.

John Grogan, the Labour MP for Selby, welcomed the White Paper proposals, saying they would benefit tomorrow's pensioners.

"The winners are the people who are going to retire in 30 or 40 years' time," he said.

"They'll get a decent state pension, but will also benefit in terms of the supplementary pensions that are being introduced, which employers and employees will pay into.

"They will have to work longer but, with an ageing population which is living longer, we needed to look at the pension age."

The higher basic state pension should also drastically cut the number of pensioners claiming pension credits the means-tested "top-up" payments, so disliked by people in retirement now.

It is today's pensioners who are set to be the biggest losers in the shake-up.

Les Marsh, a member of the National Pensioners Convention and former Sheriff of York, said he did not believe the plans helped the over-65s.

"As far as I'm concerned, my generation has been left out in the cold," he said.

"We've got six years to go before these new plans come into action. And remember, the generation we're talking about didn't have high enough incomes to save for retirement they paid their tax and depended on the state to provide."

Women over 60 are particularly hard hit, according to Anne McIntosh, Tory MP for the Vale of York and Shadow Minister for Women's Pensions and Family Welfare.

Many did not accrue enough NI contributions to be entitled to a full state pension, and those who have been widowed face particular hardship.

"While I welcome the Government's proposals to improve the pension entitlement for women in the long term, women who are pensioners now or who are approaching pension age will be disappointed that these plans are not being introduced until 2012," she said.

"What proposals are in place to help them? By raising the state pension age for women from 60 to 65 by 2020, the Government will save £10.1 billion. I would like to see the Government re-direct this huge saving into helping this group of women as they approach retirement now."

Mr Grogan also said he had concerns for people involved in heavy manual labour aged under 47, who will suffer as the pension age is increased. He said: "There are some jobs liking mining where you clearly can't continue working into your late-60s."

Restoring the link between the state pension and earnings

This was a key point in Lord Turner's Pensions Commission, which published its report in April. The move will mean greater yearly increases in the state pension. It will be tracked to average earnings, rather than prices, as is currently the case.

The Government estimates the changes will produce a basic state pension worth £73 a week at today's prices, when it is introduced in 2050. The figure would have been £33 under the present system.

However, the reforms have been delayed until 2012 two years after Lord Turner recommended and are "subject to affordability and the fiscal position", allowing Gordon Brown a way out of the costly pledge.

Raising the state pension age

Of course, someone has to pay for these higher state pensions and, as ever, it is the worker who does so.

The Government plans to phase in a gradual increase in the pensionable age from 65 to 66 from 2024, 67 from 2034, and 68 from 2044. The good news for anyone aged 47 or over is that these reforms will not affect you.

Women face eight more years in the workplace, as the retirement age is raised from 60 to 68 over the next 40 years.

Helping women and carers receive a full pension

Lord Turner called for a state pension based on residence rather than National Insurance (NI) contributions. This would have entitled women who have worked in the home rather than in paid employment to a full pension.

The Government rejected this, but have reduced the number of years of NI contributions required to qualify for a full state pension, from 39 years for women and 44 years for men, to 30 years for all.

And the White Paper does contain plans to enable people to build up entitlements while caring for children under 16 and the severely disabled.

Encouraging people to save for retirement

From 2012, all workers will be automatically enrolled in a new system of personal pension savings accounts, unless they already have a more generous occupational pension.

Companies will have to make a compulsory contribution of three per cent of salary, with employees paying four per cent, and the Government one per cent.