Pensions rescue plan dismissed

Radical proposals for overhauling pensions - including the restoration of the earnings link for the basic state benefit - have been rebuffed by ministers.

Work and Pensions Secretary Alistair Darling has dismissed as "simplistic" a report to be published tomorrow by influential think-tank, the Institute for Public Policy Research.

There is growing concern that many people in their thirties will not be covered for their retirement because firms have switched to pension plans linked to an unpredictable stock market.

The report by the IPPR, which normally has close links to Tony Blair, rejects the Chancellor's proposals for pension credits for the poorest. Instead, it is expected to call for the earnings link to the basic state pension to be restored, 20 years after it was abolished by Margaret Thatcher's regime.

The report warns of a pensions timebomb with millions having to work into their seventies unless the system is overhauled.