STATE pensions should be scrapped in favour of a compulsory contribution from workers, a think-tank has claimed.

Reform Scotland said the “conspiracy of silence” on retirement support must end and is calling for cross-party support. It has published its Pension Solution paper ahead of next week’s Budget and says the current set-up is unsustainable and requires a “fundamental rethink”.

This includes diverting a percentage of salary payments to a defined contribution scheme and allowing individuals to draw their pensions at a time of their choosing. It also suggests allowing people to pass their funds to their family upon death to prevent the pot being “lost”.

Chairman Alan McFarlane said: “The idea that we are all ‘paying in’ to our pension is a myth and we need the political and moral leadership required to debunk that myth.

“National Insurance is nothing more than income tax with a nicer name. Current taxpayers pay for current pensioners, and have done so since the invention of the state pension. It is simple logic that as the number of pensioners increases at the same time as the number of taxpayers decreases, something has to give.

“Reform Scotland’s Pensions Guarantee is fairer for pensioners because it gives them certainty over if, when and what pension they will have. And it is fairer for taxpayers because they are able to contribute towards their own retirement rather than paying for the retirement of others.”