The Confederation of British Industry (CBI) called today for the retirement age to be increased to 70 in exchange for a bigger state pension.
The group said the British government should increase the basic state pension to the level of the Pension Credit to reduce the need for means-testing and help low-paid workers.
But to fund the rise, it said the state retirement age should gradually increase to 70 between 2020 and 2030.
It estimates the move would led to around 7.1 per cent of GDP being spent on pensions by 2050/2051 compared with an estimated 6 per cent under the current system.
In a report on tackling the pensions crisis, the group also called for both employers and workers to save more into pensions.
It said all employers who could afford to contribute to staff pensions should do so if their staff were also paying money into them.
It added that new employees should automatically be opted into pension schemes, as this was the best way of increasing take up among staff.
PA