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People need to start considering retirement as a process rather than an event, it has been advised.

There needs to be a revision of the whole concept, said Dr Ros Altmann, advisor to the pension industry, who said that people can always choose to do part-time work if they so wish.

She stated: "Most people are not old at 65. We all know lots of people in their late 60s who are fit and healthy and perfectly capable of working well."

Dr Altmann blamed society’s perception of older people for their reluctance to work in later life, adding that people should not feel pressured to stop working entirely.

Total contributions to private pension schemes rose by only two per cent to £85.2 billion in 2007, following five years of strong growth, according to figures published by the Office for National Statistics.

Employer contributions to funded occupational pension schemes fell from £38.7 billion in 2006 to £37.0 billion in 2007, as private sector defined benefit schemes moved from deficit into surplus.

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