THE chief executive of Swindon's chamber has backed a call to overhaul the pensions system.

The British Chambers of Commerce has called for an overhaul to pensions before the situation hits meltdown, with fewer people saving, more people living longer, and the state pension becoming increasingly inadequate to cover day-to-day costs.

The BCC says two steps are needed to revitalise UK pensions.

Firstly, it has called for a flat-rate basic state pension to be introduced and any means testing to be phased out.

Secondly, more incentives should be introduced to encourage small firms to contribute to pension schemes. The BCC says employer contributions increase the take-up of pensions, and Government incentives would be a boost.

BCC director general David Frost said: "Radical action is needed on pensions to prevent a massive burden on the public purse in the future. The Government should continue to reject calls for further compulsion. It would only serve to strangle employers and employees and there is little evidence it would increase overall levels of savings."

Swindon Chamber chief executive Dennis Grant said: "I back this standpoint but I am also realistic.

"When you look at the UK and the pensions black hole because that's what it is there's a chasm and the cost of rectifying that would be huge.

"Politically it's a minefield, that no government worth its salt would venture into.

"It's not just an issue for the Government, it's an issue for workers and employers.

"All three elements need to come together. Employers have a duty of care to their employees, who spend so many hours each week with them, and workers need to think about a pension when they are 25, not when they are 50.

"There needs to be some action, rather than just holding a conference and each side blaming the other. At the moment you can see why people are disconsolate about pension schemes."

The BCC represents companies employing more than five million people in the UK, which is about 30 per cent of the workforce

The Pensions Commission is about to unveil its first findings.

Last week Swindon-based Nationwide warned that the current situation could turn into a crisis if left unchecked, and called on the Government to act to restore confidence in the pension system. Its research showed that two out of five people think they will go short in retirement.

This week Adair Turner will produce an interim report into pensions for Downing Street, and is expected to recommend National Insurance contributions are increased to fund pensions.

It is also believed to criticise the Labour Government on its pensions record.