Amid claims that employers contributions to occupational pensions will be run down to minimum levels, some economic observers have claimed that they will leave many people, particular women and the self-employed, considerably out of pocket come retirement.

But with so much confusion surrounding pensions at present, what impact will Personal Accounts have on retirement income for most people?

Forming a central plank of the government's National Pensions Savings Scheme, people will automatically be provided with a Personal Account.

Employers will be required to pay a minimum of three per cent of a worker's salary into their Pension Account, topped up a five per cent contribution from the employee themselves. The government will also contribute to the accounts through tax relief.

However, many quarters have expressed concerns that the minimum required contribution from employers is too low and could leave many workers considerably worse off.

Indeed, new research from Scottish Widows revealed that two-third of British firms plan to cut contributions to new workers to minimum levels, while 23 per cent intend to reduce contributions to existing staff.

Ian Naismith, head of pensions market development at Scottish Widows, said: "It is very worrying that companies who already have generous pension arrangements are likely to reduce their contributions once personal accounts are introduced."

However, the effects of Personal Accounts will not be uniform across the British population, with certain demographics benefiting considerably more than others.

The Pensions Policy Institute calculated that women are less likely to have a record of continuous contributions to their Personal Account as a result of career breaks, most often to raise children.

Women also continue to experience lower average earnings and more expensive annuity rates due to greater longevity. As a result, women are expected to have a weekly income in retirement from their Personal Account of just £51, compared with £74 for men.

Mr Naysmith commented: "The government's reforms mean that many women will get a much better deal from State pensions than at present, but despite the introduction of Personal Accounts they will continue to lose out on private provision."

But it is not just women that may end up worse off with Personal Accounts. With no employer to boost contributions, self-employed people could end up with weekly income of just £46 a week in retirement, even if they contributed at the same rate and for the same length of time as an employed man.

Alterations to the means-testing system also mean that the average self-employed man would only be £12 better off a week than if he had saved nothing at all.

But Personal Accounts are not all doom and gloom. It has been estimated that if people are prepared to work for three years longer until 68 rather than retiring at 65 they could boost their income by a massive 32 per cent.

However, this is unlikely to be the case, as 58 per cent of respondents to the Scottish Widows survey said they would be unwilling to do so.