With weak growth in consumer income and confidence influencing contributions to pension plans and low interest rates affecting the take up of annuities, the first half of the 1990s have proved particularly difficult for the pensions industry. The take-up of new personal pension plans has fallen by 54 percent since 1991 whilst new annuities have slumped by 79 percent.

Although nearly nine out of ten (89 percent) males and eight out of ten (77 percent) females in full time employment are members of a pension scheme, data from the General Household Survey suggests much lower levels of pension provision among the self-employed and those in part time work.

The increasing numbers of people working part time or in self-employment are used by government to justify their campaigning for individuals to make more provision for their retirement. To set it in context, however, although growing the self-employed still only represent 12.5 percent of the working population and are being used to some extent as a propaganda tool to encourage private sector pension provision in place of payments from the public purse.

The current state pension scheme is really a sophisticated form of the pyramid money circulation schemes so recently reviled in the media, with increasing amounts paid to current pensioners only able to be financed by recruiting higher numbers of new members - i.e. new national insurance contributors.

Since 1991, payments from the National Insurance (NI) Fund for state pensions have increased by 12 percent despite continued government efforts to restrain expenditure, including the 1980 decision to raise state pensions in line with prices rather than average earnings. With wages tending to rise faster than prices the effect on social security spending is now substantial, saving an estimated £7.5 billion in 1996.

Long term, however, where the basic state pension once represented 22 percent of average male earnings, its current worth is around 15 percent of average earnings - if the process continues, pensioners in the year 2020 can expect their state pension to be worth as little as 8 percent of average earnings. Exclusive research carried out by the National Opinion Poll (NOP) for MAPS suggests the public does not support such moves, with 80 percent agreeing that the state should provide a universal pension sufficient for a comfortable retirement.

The argument put forward against raising the pension in line with earnings is the 'demographic timebomb' - that to do so would impose an intolerable burden of taxation on future generations as there would fewer numbers of working people to support the retired population.

The timebomb argument is in fact not as fearsome as it is portrayed. The equalisation of the state retirement age at 65 for men and women from the year 2010 reduces much of the impact, whilst the artificiality of defining a dependency ratio can also be called into question.

The net result of the reductions in state provision and the increasing importance of individuals making their own provision will be a lower standard of living for many in retirement than they may have expected - the MAPS research reveals that whilst 83 percent of people agree that the state pension will be insufficient to support them, over half the population (57 percent) are unsure of how much they should be contributing to a pension for a comfortable retirement.

The result may be that any savings the Government makes on pension payments are simply spent on income support, housing benefit and council tax benefit for the poorest of pensioners. If in the future many people can expect to spend long periods out of work or on short term contracts or in low paid or part time jobs then the conditions that allowed private pensions to flourish will no longer be applicable and people will increasingly fall back on the state.

In searching for a solution to the state funding problem, politicians have been looking abroad at the systems which exist in places such as Australia, Singapore and Chile where some element of compulsory saving is part of the package. Whether such a system could be successfully imported into the UK would depend to a large extent on the level at which compulsory contributions was set - the MAPS research indicates that there is a slight majority of opinion in favour of compulsory contributions to a pension plan (56 percent).

It may well be that consumers are far more likely to take their pension funds seriously if they understand that they 'own' it, rather than it being a part of some mysterious State or company scheme. Such a transfer of ownership could have the positive effect of increasing savings levels and spreading the equity cult for the benefit of millions of people currently saving through bank and building society deposit accounts.

Perhaps the most important void that needs to be filled is in education of the public about retirement planning and restoring consumer's confidence in the industry to encourage them to make some provision. Research carried out for MAPS demonstrates that six out of ten people wish they knew more about pensions, whilst nearly seven out of ten people (68 percent) felt that pension salesmen are more concerned with their commission than ensuring they supply a suitable pension plan.

Against such a background, it may be time for the leaders in the pensions industry to collaborate on some form of generic advertising campaign designed to both educate and promote confidence in the industry.

Alongside this, it is surely time for the regulatory authorities to clamp down on companies who are dragging their feet on pensions mis-selling compensation. Not until this issue is consigned to the dustbin and removed from public consciousness, will the industry have the opportunity to progress.

The administrative costs of regulation which are borne by the company, but ultimately the policyholder, also provide a strong argument for a system of secondary funded pensions run by the government and the private sector as an alternative to occupational and personal schemes. It is believed that these could offer better returns to policyholders through lower administrative and selling costs and reduce the public fear of being 'conned' by over zealous pension salesmen.

It is MAPS belief that the basic state pension will still be in existence in the year 2020, unlike 60 percent of respondents in the exclusive MAPS research who agreed that the basic state pension would cease to exist in 20 years time. It may be, however, that it is not paid until a later age, as the trend to higher state retirement ages continues throughout Europe. As people stay longer in the workforce and as life expectancy increases, so it would not be surprising to see retirement ages edging up further in future years. Any such move would obviously have a major impact on state pension provision.

Whilst the basic state pension is expected to continue, the structure of its payment may be very different with it once again becoming a means tested benefit payable only to the poorest of pensioners who have been unable to accumulate a private pension fund. For the majority of pensioners though, MAPS expects some form of compulsory contribution scheme along the Chilean lines to be providing retirement benefits in 2020.