The state pension system is massively complex, expensive and failing to help pensioners, a think tank has claimed.

In a report published on Monday the Centre for Policy Studies called on ministers to simplify the current system by boosting the basic state pension and ditching means-tested benefits.

A spokeswoman for the DWP told ePolitix.com: "The government recently announced new arrangements for older people who may choose to defer taking their state pension.

"People will be given the choice between an increase in the weekly pension for each year of deferral, or a one-off taxable sum on retirement.

"Our new deferral arrangements, where increments will be set at 10.4 per cent, will mean that someone deferring for 5 years will receive a basic state pension of around £118 a week - and someone deferring on average amounts of state pension would receive around £150 a week.

"We are not raising the state pension age to 70, but giving people a real choice about how they wish to retire. Not only does this top the CPS proposal, it also gives people the freedom to make the choice that suits them best."

Forum Response: Association of Retired and Persons Over 50

Don Steele, director of social policy at ARP/050, told ePolitix.com: "The Centre for Policy Studies is simply re-articulating the myriad pension solutions being put forward by a variety of organisations and individuals. It is a composite and fairly comprehensive wish list.

"In the view of ARP/050 there will be no lasting answer to the problem of relative poverty in retirement until the state pension is taken out of the welfare system and made into a properly funded universal scheme, with a basic level of payment based on needed income rather than 'safety net' principles. Such a scheme would include the possibility of boosting retirement income by the payment of AVC's.

"The flight to the private sector (as the evidence demonstrates) will simply not be accepted by the potential investor. The economic principles of the casino are not good enough when it comes to providing for the future.

"The CPS suggestions have merit but it is the political will to change the status quo which is lacking and, as yet, no-one has come up with the answer to that one."

Forum Response: Help the Aged

Mervyn Kohler, head of public affairs at Help the Aged, told ePolitix.com: "Welcome to the club. It's good to see the Centre for Policy Studies joining the growing protest against our inadequate and inefficient state pension system.

"The means testing and bureaucracy associated with top-up benefits engenders a culture of non-take-up, which leads ultimately to poverty and marginalisation of some of the poorest members of society.

"The solution to the current crisis in pensions may involve working longer, but this must be a genuine option and not a compulsory edict."

Forum Response: Age Concern

Gordon Lishman, director general of Age Concern England, told ePolitix.com: "The best way to lift pensioners out of poverty would be a non-means tested basic state pension of at least £100 a week.

"We want a root and branch reform of the whole system, rather than a patchwork of improvements, to ensure that money reaches those who need it.

"We would not agree that the state pension age has to rise to meet the cost as this would hit some of the worst-off older people in the UK.

"However, older people must have the option to continue working if they want to, which means that employers should not be allowed to set a mandatory retirement age."

Forum Response: OPAS

Malcolm McLean, chief executive of OPAS, told ePolitix.com: "I don't disagree with any of this in principle. It would certainly be simpler and would no doubt find favour with pensioner groups who continue to raise objections to the ever increasing reliance on means tested benefits.

"The problem would be solely one of cost and how do we get from where we are now to where we would like to be. Unscrambling the present systems would not be quite as easy as Mr Elphicke implies and I can't believe the move could be made on a 'fiscally neutral basis'.

"Also pushing the state pension age back to age 70 will have both social as well as economic consequences which will need to be carefully thought through."