UK - Peter Hain, the UK minister for work and pensions, has warned individuals have to take responsibility for their own pensions futures of face a "nightmare" pension crisis in years to come.

His comments came ahead of this afternoon's second reading in the House of Commons, the lower chamber of UK parliament, of the Pensions Bill 2007, which is designed to push through the first stage UK pension system reform by 2012 and which will place a requirement on both employers and employees to do more to save for their own retirement through privately-funded arrangement pension plans.

One of those key requirements being introduced is automatic enrolment, but not mandatory contributions, into good workplace pensions, albeit employers and employees will eventually be required to contribute.

"Radical change is needed. One hundred years ago few people lived long enough to collect a state pension - on average men only survived to age 49 and women to 53. Today, one in four babies is expected to live to 100," said Hain.

"Around three quarters of people say they will need more than the State Pension to live on. But actions do not match words - only around four in 10 working age people are saving into a private pension.

He continued: "With increasing longevity, if we don't tackle the challenge of under-saving, by around 2050 we face the nightmare of a pensions crisis with people of working age struggling to pay for an ageing population. The state, individuals and employers all share in the responsibility to avert such a crisis - so we must act decisively now to renew the social contract between us."

Among the early changes being introduced through this latest Bill are the extension of pensions coverage from 2010, the restoration of the earnings link to the basic state pension in 2012 and reforms which will see people retiring at the earliest at the age of 68 by 2046.

Similarly, the Bill will introduce reforms needed to deliver the personal accounts regime, however, the government has swayed against appearing to make pensions membership compulsory by opting for automatic enrolment into a qualifying workplace scheme or personal accounts for all workers aged between 22 and state pension age, and who earn more £5,035 a year, along with a campaign to highlight the need for personal savings.

"Automatic enrolment will combat the inertia which is such a barrier to saving, while the minimum employer contribution and tax relief will mean individuals' contributions are matched £1 for £1," said Hain.

"But it's crucial that individuals play their part in this renewed social contract. To achieve the type of lifestyle they expect in retirement they must take personal responsibility by participating in a pension. For most, the downsides of not saving far outweigh the small risk of saving and later regretting it. These reforms will give millions of people the means to fulfil their aspirations for a better and more secure income in later life," he added.

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