Millions face losing top-up pension payments

The most they can accrue is a total state pension of about £250 a week, which is £5,000 a year more than the proposed flat-rate replacement.

It is not yet known how the Government will deal with the millions of people who have made extra contributions to both Serps and S2P through NI and were expecting to receive a total weekly payout of more than £140 from their combined pensions. Further details will be available in the Government’s White Paper on the issue, due in spring.

Experts believe that those workers who have accrued a total state pension worth more than £140 a week could see their entitlement frozen at the level they have achieved now, and that when the new flat-rate pension rises with inflation it will eventually catch up to their level of extra entitlement.

There is therefore a possibility that they will derive no benefit from their additional payments whatsoever.

Deborah Cooper, a pensions expert at consultants Mercer, said that it would be “outrageous” to take away entitlement that people had already built up.

Mr Khalaf said that it would be “hugely costly” to the state for people to keep what they have accrued.

He added that the road towards the flat-rate state pension would be “a horrendous journey”. It is currently possible to opt out of this second state pension and have the money paid into a private pension pot instead.

Those in gold-plated final salary pension schemes pay reduced National Insurance because they do not pay into the top-up pension.

Miss Cooper said it was still too early to say exactly how the changes would affect people who have opted out of the second state pension.

Those in final salary schemes, such as teachers and nurses, are likely to pay an extra 1.4pc in National Insurance contributions when the flat-rate pension system is introduced.