Two of the industry's most influential bodies, the National Association of Pension Funds (NAPF) and the Pensions Policy Institute (PPI), have called for a citizen's pension to replace the current state pension. According to them, it would be simpler to understand and could be implemented by 2010.

Under the proposals everyone would receive £105 per week regardless of savings.

Women who miss out on the full state pension because of breaks in their work record caused by bearing children stand to gain from the proposed changes.

NAPF chief executive Christine Farnish explained that such a system would clarify state pension provision and provide an incentive to save.
"Immediately, the deal from the state is clear," she said. "Anyone wanting a better income in retirement understands the need to make additional saving, either through a workplace pension or some other means."

Already, the Lib Dems back the proposals and the Conservatives are exploring the idea. Alan Johnson, the pensions secretary, said in October that it "deserves much closer examination" and that he was "veering towards being very positive about it" leading to speculation that it may be a leading contender for possible reform in the wake of a general election.

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