The UK’s pension market is predicted to grow 40 per cent to nearly £75 billion over the next four years.

A survey conducted by information firm Datamonitor forecasts that more and more Britons will look to supplement their state pensions and tax advantages in light of an ageing population.

Datamonitor analyst Annabel Gorringe pointed out that the government has not been successful in encouraging wider pensions take-up through its Stakeholder pension scheme and should use the money earmarked for the promotion of these products and means-tested pensions.

The survey forecast that the British life insurance market would expand 44 per cent by 2008 to £46 billion, despite recent scandals, a drop in consumer confidence and poor stock market returns, Reuters reports.

The UK pensions industry is almost twice as large as the life insurance sector. The life market shrank to £31 billion last year from £41 billion in 2000, but is starting to show signs of recovery.

Life products dominate the life and pension market in France, Germany and Italy, but in all three of markets pension premium income has grown over the last five years.