The Pensions Commission is set to reject the idea of a single, simple basic state pension as the answer to the looming pension crisis.

Chairman Adair Turner said he was "very wary" about adopting the scheme in line with that advocated by the National Association of Pension Funds.

Under the NAPF's proposal, the state second pension would be scrapped in favour of a universal citizen's pension linked to earnings so that it retains its value in the face of rising living standards.

Turner told the Financial Times that the state had an interest not just in providing a basic pension to prevent poverty, but in a system that strongly encouraged or compelled people to make some provision that would relate their final pension to earnings.