Millions of Britons are failing to save enough for their old age, a government commissioned report concluded yesterday.

The Pensions Commission estimated that around 12 million people are not saving enough for retirement.

Former CBI chief Adair Turner, who chairs the committee, said higher taxes, raising the average age of retirement and increasing savings should all be considered to make up the shortfall.

"What we're saying is there has to be a mix of things," he said.

But Turner was cautious on reports that there is an annual shortfall of £57 billion in savings for old age.

"When you look at the figures, if you try and solve this by saying: 'Let's increase taxes or let's increase savings or let's increase the average retirement age' you can scare yourself silly with the figure, which is what's happened with this £57 billion," he said.

Responding, Number 10 welcomed the report and said it was looking for "a long term consensual approach to this issue rather than a knee-jerk short-term response".

The prime minister's official spokesman defended the government's record on pensions, insisting ministers had been right to focus extra cash on tackling pensioner poverty.

Downing Street also indicated that two options for addressing the crisis, raising taxes or implementing a higher state pension age, were unlikely to be adopted.

"It is a crisis that could happen in 15 to 20 years if we don't plan to tackle it now," he said."

The Conservatives described Turner's report as "a wake-up call".

"We need to reform the state benefit system, which he shows is far too complicated," said shadow pensions secretary David Willetts.