Lord Turner of Ecchinswell’s report on pensions sets out an unanswerable and pressing case for reform of Britain’s retirement rules before the weight of demographic change blights future generations. Though a familiar argument, until addressed it cannot be emphasised too often: in less than 30 years there will not be enough working people to pay for the pensions of the retired. Lord Turner sets out four options: accept poorer pensioners; raise taxes; increase savings; work longer.

Given that the first must be avoided, he blends the other three into a formula under which the vast major-ity of the retired could look forward to two pensions. His proposals merit wide public consideration.

Lord Turner’s chief innovation is to tackle the behavioural gene that causes most humans to switch off when it comes to making sensible decisions about their long-term finances. Under his proposals, such planning would be done for them. Workers above the age of 21 would be enrolled into a national pensions savings scheme unless they opted out. Lord Turner’s suggestion that 4 per cent of their payroll salary is matched by 3 per cent from employers and 1 per cent from the Government is not prescriptive. Employers have understandable concerns about what looks and smells like yet another tax. Ministers may wish to tinker with the mix. But the move towards a funded system in which individuals invest in their retirement with a personal plan is a vital step.

Lord Turner envisages the state pension as a safeguard against poverty, which the current £82.05 a week, or £4,265 per year (often considerably less for women who have gaps in their national insurance contributions) can scarcely be called. A universal scheme, stripped of complicated and often misunderstood or resented means-tests, and pegged to earnings rather than indexed to slower-rising prices, is attractive but expensive. It is supported by both the Conservatives and Liberal Democrats, though neither currently has to balance the books. Gordon Brown, apparently wedded to targeted help for pensioners even though it discourages saving, is increasingly out on a limb. But Lord Turner’s failure to re-commend an end to all means-tests may reflect a failure of will on his part.

Increases in the state pension can only be afforded by an increase in the retirement age to reflect the norm of longer life. Here Lord Turner, rightly, tries to place the inevitable alarm in context. Under his model, nothing need happen before 2020. Realising a personal pension at 69 could be matched by drawing the state pension at 67. Public sector workers are valu-able and well-regarded servants of the community, but there is a clear unfairness if they get full benefits long before their private sector counterparts.

There is much to welcome in this. Lord Turner was right to ignore his remit and consider the state pension as well as private provision, even though doing so has apparently irked the Chancellor. His emphasis on the need to work longer provides valuable political cover for the Government to raise the retirement age. The principle behind his savings scheme deserves support. And his greatest service is to succeed in getting the country to talk about one of the driest, most impenetrable and yet most important public policy issues. This is not the start of the debate. We are well into it. The Government must reach a conclusion before it is pensioned off.