Blunkett considers compulsory pension saving

Britain's new pensions minister said today he had not ruled out forcing people to save for their pension and insisted the current…

Britain's new pensions minister said today he had not ruled out forcing people to save for their pension and insisted the current set-up was unsustainable.

David Blunkett told BBC radio he wanted to form a consensus with opposition parties to tackle the problem.

"Over the last 50 years we've seen . . . life expectancy rise by at least a decade and we've seen people want to retire earlier than they were . . .

and we have therefore the combination of fewer people actually in work," he said.

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"When the pension system was set up, there were 10 people in work for every one in retirement, now there are four in work for every one in retirement. We can't sustain that.

"I haven't ruled out the issue of some means of ensuring that people do save," Mr Blunkett said.

Government adviser Adair Turner is due to deliver a report on pensions in the second half of this year. He has already set out four options - allowing the number of poor pensioners to grow, raising taxes, increasing private saving, or raising the retirement age.

The Association of British Insurers says Britain suffers a £27 billion savings shortfall each year.