Campaigners say the pensions triple lock remains “vital” as a major report warns millions of workers risk financial hardship in retirement. The Institute for Fiscal Studies has called on the Government to commit to “never means-testing the state pension” and ensuring it increases “at least as fast as inflation”.

The respected think tank warns hikes in the state pension age have “substantially pushed up the risk of income poverty among those in their mid-60s”. There is concern people who are still renting their homes when they hit retirement age are at “heightened risk of poverty”.

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It also warns that around 20% of private sector employees – and 80% of self-employed workers – are not saving into a private pension. Nearly four out of 10 people with a “defined contribution” pension scheme – which, unlike a final salary scheme, is based on how much is paid into a pension pot – are on course to miss out on an “adequate retirement income”.

The report calls for all employees to receive an employer pension contribution of at least 3% of their total pay – and not only if the worker also makes contributions.

The recommendations have fuelled controversy because the report makes the case for eventually replacing the “triple lock” – which ensures the state pension increases by whichever is highest, inflation, average earnings growth, or 2.5%.

The IFS says the Government should set a target for the new state pension as a percentage of average earnings, suggesting it commits to “keeping the triple lock in place until then”. It argues that “retaining the triple lock while raising the state pension age would hit poorer people” because the “loss of a year of state pension income is more important for those with lower life expectancy”.

However, Dennis Reed of the campaign group Silver Voices said: “The triple lock is the essential safeguard to prevent poverty and ill-health in old age and is widely supported by the public. Scrapping the lock would signal that society no longer believes that older people deserve a dignified and comfortable retirement. “

Caroline Abrahams of Age UK said: “The triple lock mechanism for increasing the value of the state pension each year has proven successful at improving the standard of living for millions of low-income pensioners, and we continue to support its use going forward. Many older people rely on their state pension income to afford the essentials, while one in eight get all of their income from the state, so it makes a particularly big difference to people in this position.”

Joanna Elson of Independent Age said: “The triple lock is by no means perfect, but in the short-term it is vital as it protects the often dangerously low income of older people living in financial hardship.”

She warned that pensioners who are solely reliant on state benefits “could be further pushed into poverty” without the triple lock.

A Government spokesperson said: “We’re reforming the pensions market to drive economic growth, ensure greater security in retirement and put more money in people’s pockets. Our Pensions Schemes Bill will make pension pots work harder for savers, and our forthcoming Pension Review will explore how we can take this even further to give hardworking people the retirement they deserve.”