by business editor Trevor Sturgess

Forget retiring at 60 or 65, you will now have to work until you are 70 to get your state pension if bosses have their way.

The Institute of Directors (IoD), which has a major Kent branch, says that the state pension age should rise to 70 “as soon as reasonably practical.”

In its “Roadmap for Retirement Reform 2009,” it also calls for the abolition of the state second pension, along with most means-tested state retirement benefits.

It urges the Government to divert the savings into a universal Basic State Pension “probably above” the level we see today and topped up by Pension Credit.

It claims the current private pension-saving regime “does not meet 21st Century needs and should be replaced.”

Graham Leach, the IoD chief economist, said: “Radical simplification is needed. Startling increases in longevity in recent decades also mean that it is unrealistic to expect to be able to fund a potential 25 to 30 year retirement from an effective 30 to 35 year working life.

“New approaches are needed to recognise this reality. The whole area of retirement needs to be looked at holistically, including how we fund the care needs which will come with increasing longevity. We need a state and private retirement system fit for the 21st Century. This is a policy journey which needs to begin now.”

But TUC general secretary Brendan Barber said that the IoD would consign tens of thousands of employees who are forced to retire at 65 to five years of “workless limbo.”

“With employers fighting hard to keep a retirement age of 65, such a proposal would condemn many older people to a limbo where they are too old to work and too young for a state pension,” he said. “Taking from the poor to give to the rich is no way to reform the pensions system.”

He added: “The better off you are, the longer you live and the more years you get to claim a state pension. A big rise in the state pension age would mean the less well-off lose a much bigger proportion of their pension than longer-living affluent pensioners, who are much less dependent on the state pension in any case.”

He claimed the IoD failed to address the “the platinum-plated” pensions enjoyed by top bosses, often paid out at the age ogf 60.