Average earners 'will be £1,500-a-year worse off' under the new flat-rate state pension Workers earning £26,000 will lose out on £1,508-a-year if they retire in 2030 Trades Union Congress says you lose out more the longer you work Up to 20 million private sector workers affected, but public sector benefit Private sector workers earning the average wage will be £29-a-week worse off when the new flat-rate state pension is introduced, a new estimate shows. The introduction of the single tier pension in 2016, worth £144-a-week in last, will bring an end to the second state pension (S2P), which acts as a top-up to the basic state pension. The loss of S2P will be of detriment to millions of workers in the long-term, claims the Trades Union Congress, as they would otherwise have been able to build up state pension entitlements worth more than £144-a-week. Private sector blow: Workers will lose out as a result of the second state pension ending. The TUC has calculated that someone on the national median income of £26,000-a-year with a full employment record could lose out to the tune of £29-a-week, £1,508-a-year, if they retire in 2030. Although it is higher earners who stand to lose out the most from the end of S2P, middle and lower earners can also expect a state pension income much lower than they would have had under the current system. TUC General Secretary Frances O'Grady said: 'The state second pension was designed to give low and middle income earners a much-needed top up to the basic state pension. Scrapping it as part of the new single tier pension will mean that many low and middle-income private sector workers, particularly those several decades away from retirement, could be thousands of pounds a year worse off in retirement. While the Government is right to move towards a simple, single state pension, setting it at just £144 a week is far too low and will mean many future pensioners will be worse off. Workers who have built up S2P entitlements will still retain them even after the flat-rate is launched in April 2016, but the TUC says that the longer that they work after 2016, the more they will miss out on state pension income they would have earned under the existing two-tier system. Public sector workers will be among those to benefit the most when the new rate is introduced, as many of these are currently 'contracted out' of S2P. This means they pay less in National Insurance contributions, but in return are only entitled to receive the basic state pension of £110-a-week. From 2016 they will have to pay more NI, but will be able to accrue more state pension entitlements up to the £144-a-week maximum. Ms O'Grady said that the Government needs to raise the rate of the pension or do more to encourage private saving through its automatic enrolment programme. She said: 'The Government should raise the single tier pension rate, and look to raise minimum contribution rates into workplace pensions once auto-enrolment has had time to establish itself, so that fewer people lose out under the Government's pension reforms.' The Department for Work and Pensions has challenged the TUC's analysis however, claiming that most people retiring by 2040 will be better off with the new state pension. A spokeswoman said: 'The flat rate will provide a fair base, set above the basic level of means test, helping people to know how much they need to save for the kind of retirement they want. With millions not saving enough for retirement and only one in three private sector employees having a pension at all, the Government is undertaking the biggest reform to pensions in generations (automatic enrolment). The reforms have, in less than a year, seen 1.4 million people automatically enrolled into a workplace pension.