Three in four private sector workers facing poverty in retirement

Many private sector workers face poverty when they retire

They do not have a company pension or any other type of pension savings apart the state pension, which is only £87.30 a week.

The report, from the Policy Exchange think-tank, says the scale of Britain's pensions crisis is "worse than originally feared."

Many will be forced to keep on working into their late sixties or seventies to make ends meet. A record 1.2million pensioners are already working and the number is growing.

Experts talk of a "pensions apartheid" developing between public sector workers, most of whom are members of the Government's gold-plated pension scheme, and private sector workers.

One of the biggest blows for private sector workers, who make up about 80 per cent of the workforce-has been the dramatic disappearance of generous "defined benefit" pension schemes.

Just 3.4million private sector workers have a "defined benefit" scheme, typically a final salary one, according to the report, Quelling the Pensions Storm.

This has fallen dramatically since 1991 when 5.6million were members of such a scheme.

Nicholas Hillman, the report's author, said: "Too many working-age people face poverty in their retirement. If we do not make changes now, this situation will continue for decades to come."

Another report - published today by pensions experts Aon Consulting - warns that alterations to the way companies must prepare for their workers living longer and other accounting changes could force more final salary schemes to close.