Britain's state pension system is inadequate and unsustainable, a financial think tank concluded on Thursday.

The Pensions Policy Institute warned that an urgent overhaul was needed to ensure workers did not end up with "socially unacceptable" payouts.

Forum Response: Counsel and Care

Martin Green, chief executive of Counsel and Care, told ePolitix.com: "This report underlines that there is a crisis looming. The government must take action now to ensure that there are good quality pensions for people who retire in the future."

Forum Response: Help the Aged

Richard Wilson, policy officer for incomes at Help the Aged, said: "This authoritative report demonstrates that the UK pensions system is deeply flawed and lagging way behind other countries.

"The present system of a meagre state pension supplemented by means tested benefits simply does not work. We are the world's fourth richest country and yet 2 million older people continue to live in poverty.

"Confidence in pensions has collapsed. The continuing demise of private and occupational pension schemes is simply leaving those saving for older age bewildered about what to do for the best.

"Government must stop ignoring the fact that reform of state pensions and benefit systems is long overdue. It must face up to the challenge of ensuring today's and tomorrow's pensioner population can live a comfortable older age."