Last month the Government announced it was replacing the complicated system of assessment of state pensions and top-ups with a single payment worth £144 a week in today's money.
The DWP said the more rapid reduction in means testing, following the introduction of the single-tier state pension, will help people save more and have less taken away in benefit reductions.
Those retiring now will find that for every £10 they have in a pension, they will lose an average of £3 in benefits entitlement, said the DWP. Under the reforms, people starting out in the workplace now who retire in 2060 will keep an average of nearly £9 in every £10 of what they save.
The DWP reiterated that people will be better off saving when the Government's changes to both the state and private pension systems are fully in place.
Pensions minister Steve Webb (pictured) said: "Our changes to the state pension, together with wider welfare reforms and automatic enrolment, mean we're giving lower-paid people the biggest incentive to save for a generation.
"We're making it more worthwhile for people, particularly those on low incomes, to save for their old age.
Webb added: "As we give 11 million people the chance to save into a workplace pension, with a contribution from their employer, these figures show why we must also reform our state pension to ensure that it pays to save."
Last month the Institute of Fiscal Studies (IFS) said that the proposals for a flat-rate £144 a week state pension "imply a cut in pension entitlements for most people in the long run."
