Delivering his keynote speech at the Labour conference in Brighton, Tony Blair promised “security and dignity for everyone in retirement”.

“We will … design a pension system that has the basic state pension at its core, gives special help to the poorest and provides incentives to save for hard-working families whatever their wealth or income,” he said.

The prime minister added that money saved from getting people back to work and off job-seekers’ allowance and incapacity benefit would be put into “a pension system that has the basic state pension at its core”.

The pensions shortfall is reaching critical levels in Britain and the government is facing increasing pressure to encourage more workers to save for retirement.

Work and pensions secretary Alan Johnson has said he will not force people to work longer, although those who want to continue to work past retirement will be encouraged.

The government is not expected to unveil concrete plans to tackle the crisis before next year’s election. The government-backed Pensions Commission is due to publish an interim report on the pensions crisis in a couple of weeks.

Tax changes, a slump in the stock market and the closure of many company pension schemes have deterred Britons from investing in pensions and millions now face poverty in retirement.
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