The Government is considering compelling all of the country's self employed to pay into a second pension as part of its wholesale review of pension policy, it emerged this week. Responding to a report by the independent Pensions Provision Group (PPG), the DSS said it was looking at bringing the UK's 3.25 million self-employed into a revamped system of compulsory second pensions.

In its report, also published yesterday, the PPG said more and more pensioners would be forced to rely on income support if the Government left the existing pension system unchanged. The report added that it did not see how pensioners' income could be improved unless the state pension's indexation to inflation is replaced by income.