why we have a pensions crisis

• More and more people at work today are not saving enough to provide the kind of pensions they would like in retirement.
• People are living longer.
• Employers have closed good pension schemes and replaced them with less generous arrangements. Newer and smaller employers are less likely to provide any kind of job-based pension.
• Efforts to encourage people to save - such as stakeholder pensions - have failed, even though the government spends billions of pounds on tax reliefs each year.
• The state pension is no longer linked to earnings, and falls a bit behind each year.

This means that government will rely more and more on means tested benefits to lift people above the poverty line in retirement in the future. But some pensioners do not claim, and even when they do many still face a big cut in living standards in retirement.

This is why there is a big debate about pensions. The Government has set up a Commission headed by Adair Turner. It has already produced one report setting out the scale of the problem. It is due to produce its recommendations for future action at the end of November.

Pensions can be very complicated - and that's part of the problem. But there are also some simple principles at stake. How do we ensure that pensioners get enough of the wealth produced each year to provide them with a decent living standard? And while there may be tough choices involved, the economy grows nearly every year. So another way of putting the basic question is 'how do we ensure that enough of the extra wealth we create each year goes to provide decent pensions?'

The Turner Commission's first report says there are four basic options:

• pensioners get poorer
• people work longer before they retire
• tax bills go up to pay for better state pensions and benefits
• people save more when they are working to pay for better pensions when they retire

Of course these are not either/or choices. Any real solution is going to be some combination of the last three, and without radical - and probably painful - action we will be left with growing poverty. Nor is there a single, simple way of achieving each of the final three objectives.

Minister, civil servants are standing by to work out the complicated details. But we need you to take the big political decisions.

We use the Turner Commission's options as our starting point. We'll take you through the three options and ask you to make your choices after explaining some of the arguments for and against.

Of course we have simplified the debate to some extent. After all you are a politician. But unless somebody takes these big decisions, the pensions crisis will not go away.

First we'll look at whether people should work longer, and if so, how to bring it about.

Take me to the first option