The TUC has warned that an increasing number of young people are facing poverty in their old age as Government figures show that less than half of those under 30 are saving for their pensions.

In comparison, 62 per cent of people born in the 1950s and 72 per cent born in the 1960s started a pension before the age of 30.

The TUC has warned that as people are living longer, it is more important than ever that workers start saving earlier and putting by more each year for their retirement. They calculate that someone who starts to save £100 a month at age 20 can look forward to receiving just over £142 a week if they retire at 65. Anyone who waits until 35 to start saving for their old age will probably receive £71 a week.

The TUC believes there are a number of reasons why young people are failing to join pensions schemes. It claims that many feel they have more pressing financial concerns, such as paying off their student debts or saving for a house. It has also been claimed that recent pensions scandals have left young workers suspicious of pension companies.

TUC General Secretary, Brendan Barber, has described the situation as a "time bomb" and has suggested that a fall in the number of employers contributing to occupational pensions is also a major factor. Research suggests that when employers make a contribution of five per cent or more, 69 per cent of employees will sign up for the scheme.

Mr Barber said: "Young people have started a slow pensions time bomb. Unless they take out pensions, a generation faces poverty in old age, dependent on the generosity of whichever government is in power.

"The key change that needs to be made is to compel employers to make a proper contribution to pensions. All the evidence shows that employees understand occupational schemes and will join a work-based pension scheme, where they find making their own arrangements expensive and confusing."