“We’ve studied the iceberg. We know it’s an iceberg. And we know it’s coming towards us,” David Prosser said.

“Delaying recommendations until after the election is just putting things off,” he added.

His comments came after the government announced that it will hold off from taking action on a reported £57 billion annual savings gap, between the estimated required pensions funds and what is being put away for retirement, until the final report is made by the Pensions Commission in mid-2005.

Mr Prosser said he “would like to see some solutions sooner [than 2005], so they can be integrated into the pensions simplification rules in 2006.”

A preliminary report from the commission claims that there are four options for the pensions industry in the light of this situation: poorer pensioners, a later retirement age, more investment for retirement or more taxes flowing into pensions.

However, Adair Turner, a former head of the CBI who is heading the commission, pointed out that a combination of these possible outcomes is most likely.
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