The level of poverty among British pensioners is the fourth highest in the EU, behind countries such as Romania, according to figures released by the European Commission.

The figures reveal that many over 65s in Britain are living on incomes far below the national average. However, the Department of Work and Pensions asserts that even the poorest British pensioners are better off than those living in other countries.

A DWP spokesperson said: “In 1997 our pensioners’ income was well below the European average. Today their income is nearly 10% higher than the EU average.”

The European Commission research, which preceded a Work and Pensions Committee report released yesterday on the government’s efforts to tackle pension poverty, compares relative poverty in the 27 member states. The figures show that in 2007 nearly one in three UK pensioners were living in poverty, the same proportion as in Lithuania (30%). The European average pensioner poverty level is 19%.

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A renewed legal battle to abolish the UK’s enforceable retirement age of 65 has begun in the High Court.

The charities Age Concern and Help the Aged are leading the challenge, which questions whether it is legal for employers in the UK to force their workers to retire at 65.

They will argue that the Default Retirement Age introduced under the Employment Equality (Age) Regulations 2006 fails to adhere correctly to an EU directive against age discrimination. This directive states that the UK’s enforceable retirement age could only remain if it had a “legitimate aim” linked to social or employment policy.

Although the European Court of Justice rejected the campaigners’ request to outlaw the Default Retirement Age, the UK government must still justify its decision in the High Court.

The hearing comes in the same week as the government announced it would be bringing forward a review of the compulsory retirement age to 2010. This week also saw 68-year-old solicitor Leslie Seldon bring a case at the Court of Appeal against his partners after he was forced to leave his job at the age of 65 by the terms of his contract.

Along with over 300 other employment appeals, Seldon’s is now on hold until today’s case clarifies the law.

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A government review of the default retirement age of 65 has been brought forward by a year, signalling an end to the current age at which employers can force their staff to retire.

The majority of people in the UK retire before they reach 65. However, 1.3 million people continue to work beyond the state pension age. Many more people say they would work beyind their 65th if their employer allowed them to.

The review, which had been planned for 2011, will now take place a year earlier in 2010. Minister have brought forward the review in response to changing demographic and economic circumstances.

Prime Minister Gordon Brown commented: “Evidence suggests that allowing older people to continue working, unfettered by negative views about ageing, could be a big factor in the success of Britain’s businesses and our future economic growth.”

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The vast majority of UK businesses believe that their final salary pension schemes are “unsustainable”, according to a new report by PricewaterhouseCoopers (PwC).

In a major survey of 1,000 blue-chip companies, 96% admitted they could no longer sustain their current defined benefit schemes, which are based on salary plus years of service. 16% of companies taking part in the survey had already closed their final-salary schemes to new members, and a further 6% said they planned to close schemes for existing members within the next five years.

The cost of providing defined benefit pension schemes is rising as people live longer, yet the same funds have decreased in value during the credit crunch.

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Personal Accounts, the new government pension scheme to be launched in 2012, is likely to have a “relatively small” effect on those who qualify, research suggests. It will be aimed at those who cannot, or do not join a company pension scheme.

A study by the Institute for Fiscal Studies (IFS) estimates that around 5 million people did not qualify for a company pension scheme in 2005. However, the IFS research shows that those on the scheme would accrue average contributions of just £900 that year under the new system.

“This suggests that the increase in pension saving, and therefore overall saving, brought about by the reform is likely to be relatively small,” the IFS said.

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Low-paid workers in the UK are less likely to belong to a pension scheme than their higher-paid colleagues, a report has found.

Figures from the Office for National Statistics show that 21% of men and 32% of women earning less than £300 a week were in employer pension schemes. 1.7 million men are in full time jobs which pay less than £300 a week, compared to 1.9 million women.

One reason that a higher proportion of low-paid women contribute to a company pension scheme than men is that more women work in the public sector, where membership of pension schemes is higher.

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A survey has found that half of British adults between 20 and 60 years of age are not setting aside any money for their pension.

Of the 1,358 people surveys, under-30s fared the worst, with only one in three putting anything in a scheme. This figure rose to 55% of 41 to 60-year-olds.

The most common barrier for young people is affordability, with many saying they want to pay off debts before enrolling on a scheme. Others felt that retirement was too far away to be worth planning for. Those in the 41 plus age bracket gave a variety of reasons for not putting away money in a pension scheme, including being made redundant and leaving full-time work to have and care for children.

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Workers over the age of 50 are facing a “recession double whammy”, with fears of redundancy coupled with uncertainty about how much their pensions will be worth, two charities have warned.

A survey by Age Concern and Help the Aged has revealed that 28% of over 50’s fear that they could be made redundant because of their age, as cost-cutting employers take on younger and cheaper workers. The two charities said that these concerns are backed by government figures which show that the number of unemployed people over 50 has risen by almost 50% in a year.

Nearly half of those surveyed said that they were less confident that their pension and savings would be sufficient to live comfortably during retirement than this time six months ago, while 60% were considering postponing retirement because of financial worries.

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Britons will have to work up to their 70th year if the UK’s public debt is to be brought under control within a decade, according to a report from the National Institute for Economic and Social Research (NIESR).

The institute said that increasing the age one can receive the state pension by five years could help to ease the UK’s national debt. Other options include raising basic income tax by 15p to 37p in the pound and slashing government spending by 10%, which would hit front-line services including education and the NHS.

“The choice is we have got to raise income tax a lot, cut spending a lot or work longer,” Ray Barrell, senior research fellow at the institute told the Daily Telegraph.

“There is a stronger case for extending working lives because we’re all living longer.”

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The Pensions Regulator has warned that pensions are at a greater risk of fraud, dishonesty and risky behaviour by employers who want to make savings during the recession.

The body has called on employees, trustees and pensions professionals to act as whistleblowers if they become suspicious that employers are not fulfilling their pension obligations.

“Employees and pension scheme members should report any concerns to trustees, whose duty it is to protect their interests. Trustees should contact us,” the regulator said.

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