The Institute of Directors (IoD), which speaks for more than 52,000 company directors, has proposed increasing the state pension age by as much as five years to 70 as soon as possible.

However the General Secretary of the TUC claimed that the move would consign tens of thousands of workers into five years of limbo in which they are too young to retire and too old to find a new job. The TUC also claimed it would hit the poor and those reliant on benefits the toughest.

The IoD also proposed that most means-tested retirement benefits should be replaced by a universal basic state pension that is topped up by pension credits.

Malcolm Small, the senior adviser on pensions policy at the IoD, claimed that that epic reform was needed because people were living much longer. He said: "Startling increases in longevity in recent decades mean that it is unrealistic to expect to be able to fund a potential 25 to 30-year retirement from an effective 30 to 35-year working life."

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