"The most significant shake up is probably the move in due course to raise the age at which a person is eligible for the state pension to at least 67. This comes very soon after a deal struck by the Government to set the age of retirement in the public sector at 60 for existing staff.

"Such an increase in the state pension age is ultimately inevitable and the report is worded to reflect this. Lord Turner has been careful not to commit himself to a exact ages - rather, he is saying that he can only give indicative figures. We are, in short, seeing how increased longevity brings with it major and ongoing social changes.

"However, accompanying this, we are also starting to see stresses emerge between the public and private sectors.

"Businesses and private sector workers will ask why they should support public sector pensions through their taxes. There is a lot of potential room for manoeuvre in the future on the part of Government, business and the unions. This is robust report, but it was always going to be impossible to make everybody happy. I think all the parties will recognise things to their advantage but will also see things they don't like. There is, as always, the risk that politics will interfere in rational pensions planning. Already Gordon Brown has suggested that the deals struck with the public sector so far are not necessarily set in stone.

"On the pensions credits issue and means testing – mechanisms designed to focus resources on the poorest pensioners – the report suggests that they should be phased out. I think this makes sense. Means testing is expensive and for a variety of reasons, pensioners do not like to claim means-tested benefits. Meanwhile, it has been suggested that if trends persist, at some point 75 per cent of pensioners will be tested.

"On the proposals for a National Pensions Savings Scheme, we now know a few new things: that self-employed people will be able to enter the scheme on a voluntary basis; that people will be able to make additional voluntary payments and that employers will not have to contribute if they provide certain other types of pension schemes.

"That said, I think we have to expect resistance from some businesses, especially small businesses, which are asked to pay into the National Pensions Savings Scheme. There also have been concerns that once it is up and running, the option is there for this or future governments to use such a savings scheme as a kind of stealth tax by requiring increased employer contributions.

"It is also useful to look at the situation in Australia, which where there has been a requirement for mandatory pension savings for around 10 years and where people are now building up significant amounts of money in their accounts.

"There are bound to be knock-on effects if people are required to save for their retirements – people will have less money to spend on mortgages, medical coverage, consumer goods and so forth. There is also a danger that people could come to rely on these type of savings, which may be unrealistic and dangerous. The fact may be that the state pension and National Pensions Savings Scheme combined may fail to pay out the pensions that people expect. However, there are also suggestions from the Australian experience that the schemes there are helping to increase people’s financial awareness, which must be a good thing."

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