Equitable Life board is 'imploring' ministers to make full and proper payout of £4bn-£5bn to victims. Equitable Life today made a last-ditch attempt to persuade the government to award at least £4bn in compensation to victims of the scandal that engulfed the company – 10 times the amount proposed in an official report.

Pensions minister Steve Webb said there were plans to link pension payments for final salary schemes to the consumer prices index (CPI) instead of the retail prices index (RPI). Government plans to change the measure of inflation used to calculate pension payments mean that millions of private sector pension holders are likely to see their retirement income cut.

'Nest' scheme will cost too much to attract lower paid

Employers fear a government-sponsored pension scheme covering up to 10 million workers will prove a huge turn-off and be rejected by many of the people it was designed to support.

The CBI warned today the National Employment Savings Trust (Nest) could be declared a flop when it is introduced in 2012 because it is complicated and includes up-front charges that will make it expensive for workers who only join for a short period.

Unions say they will fight pay freezes and ending of final salary schemes. Britain's largest fundraising charities have a pensions deficit of more than £1bn, prompting many to close final salary schemes and increase contributions from employees, which has sparked outrage from unions.