The Government is to consider forcing people to take out pensions to head off a growing crisis in which millions of

The Government is to consider forcing people to take out pensions to head off a growing crisis in which millions of workers could be left without an adequate retirement income. The Prime Minister has been warned that “focus group” interviews show pensions rising up the list of concerns.Compulsory pensions for people not in company or personal schemes were rejected by the Government in 1998 when they were proposed by Frank Field, the then Minister for Welfare Reform. But government sources revealed yesterday that the looming crisis had put the issue back on the agenda. The move would be controversial, because it would be seen as a further tax rise on top of the 1 per cent increase in national insurance contributions announced in the Budget. Some estimates suggest workers need to contribute up to 5 per cent of their income from the age of 25 to ensure an adequate pension.Mr Blair, Gordon Brown, the Chancellor, and Alistair Darling, the Secretary for Work and Pensions, will consider compulsion when they study the findings of three government-ordered inquiries due to report in July.One minister said: “The ground is moving on compulsion.

The pensions world has changed dramatically since we last looked at it. We may have to bite the bullet.” A Whitehall source added: “Pensions is an issue we are concerned about. The current strategy was devised for a different climate.”There are fears that the cost of the Government’s top-ups for pensioners on low incomes will become unsustainable if today’s workers do not save more for their retirement. It is estimated that seven out of 10 pensioners will qualify for means-tested benefits by 2050.Supporters of compulsion say it exists in the system through national insurance and the state second pension, which has replaced the state earnings-related scheme.Concerns about the looming crisis were heightened when Mr Brown failed to address the issue in last month’s Budget.

But according to Labour sources, at a meeting of the party’s ruling National Executive Committee (NEC) on Tuesday, Mr Brown expressed support for trade union campaigns to safeguard occupational schemes.Mr Brown was told by NEC members that pensions were now a front-line issue which concerned the public. One member quoted Mr Brown as saying the inquiries would “consider all options, including compulsory contributions from employers and employees”.A Labour source said: “In 18 months time, final salary schemes are going to be pretty rare. Compulsion is really the only way unless you want to tell the voters they will have a rough old age. If voters feel cheated out of a promise, they will blame the Government.” At present, 350,000 employers without company schemes must administer stakeholder pensions for their workers, but are not forced to contribute to them.However, ministers believe Mr Blair and Mr Brown will stop short of compelling companies to run schemes, a move which would be opposed by businesses already angry about the higher national insurance payments which take effect next April.Sir Howard Davies, the head of the Financial Services Authority, favours “some form of pension compulsion”.

Some pension fund heads say the Government should give the stakeholder schemes for low and middle earners more time to work. But a survey of 148 MPs found 60 per cent in favour of forcing people to contribute.. One of Britain’s biggest and most anarchic trade unions was in turmoil last night after two men claimed to be the rightful leader. Left-wingers, however, accused him of orchestrating a “coup d’?t”.Mr Serwotka won an election to become general secretary in 2000 on an anti-privatisation platform, beating his moderate rival Hugh Lanning by 41,000 to 33,000 votes.Mr Reamsbottom, 53, who did not stand in the poll, said the former left-dominated executive had “manipulated a vacancy where none existed”.He insisted he had never agreed to retire at the end of the month and accused Mr Serwotka’s supporters of “outrageous” behaviour at yesterday’s meeting – an allegation reciprocated in full measure.”I’ve fought Trots all my life, but I’ve never witnessed scenes like it in all my years in the union movement,” he said.Mr Serwotka said the disturbances were caused by his opponents. He described the attempt by Mr Reamsbottom to remain in the job for another two years as “an absolute outrage and an affront to democracy” and a negation of a legal agreement he had signed.He pointed out that Mr Reamsbottom did not stand in the election because he did not receive enough nominations and had not challenged the result until yesterday. He also said the union’s annual conference last week had confirmed the result by 1200 votes to about 20.* Staff at the British Museum are threatening strike action in protest at plans to axe 150 of its 1,100 employees. They fear the cutbacks, which were announced after the museum said it faced a deficit of up to £6.5m, will cause irreparable damage to its invaluable collections..