Individuals must take "personal responsibility" by saving for later life as part of a renewed social contract designed to avoid the nightmare of a pensions crisis in years to come, work and pensions secretary Peter Hain has warned.
Speaking ahead of the second reading of the Pensions Bill in Parliament - which proposes automatic enrolment into schemes from 2012 - Hain said action was vital so that future generations of workers were not left struggling to pay for an ageing population.
He said: "People are living longer, are more active and expect to be able to enjoy the type of lifestyle in retirement they had while working. About three-quarters of people say they will need more than the state pension to live on.
"But actions do not match words - only about four in 10 working age people are saving into a private pension.
"The state, individuals and employers all share in the responsibility to avert such a crisis - so we must act decisively now to renew the social contract between us."
The Pensions Bill would also restore the earnings link to the basic state pension in 2012, with the pension age increasing gradually to 68 by 2046.
The new legislation would encourage people to save through automatic enrolment into a qualifying workplace pension scheme, including the new personal accounts scheme.
Hain said: "Automatic enrolment will combat the inertia which is such a barrier to saving, while the minimum employer contribution and tax relief will mean individuals' contributions are matched £1 for £1.
"But it's crucial that individuals play their part in this renewed social contract. To achieve the type of lifestyle they expect in retirement they must take personal responsibility by participating in a pension."