The current gap between savings and the amount of money that will be needed in retirement is a cause for concern to many economists, and forcing employers and employees to contribute to a pension scheme is seen as a way of rectifying this.

But Mercer Human Resource Consulting has attacked these proposals, saying they do not take into account the precarious position of first-time buyers.

Mercer’s figures say the increase in house costs relative to pay has “swallowed up” the money the Pensions Commission saw as being put toward pensions.

Dr Deborah Cooper from Mercer commented: “While compulsory pension saving sounds like a pragmatic solution, it is unaffordable and unrealistic, at least for some.”

Mercer thinks the state system should be reformed to make it straightforward and sustainable instead. This could be done, it suggests, by combining the second state pensions with basic state pensions and linking this with earnings.

“One size fits all compulsory pension contributions will simply not work,” said Dr Cooper.

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