A LEADING Scottish economist will warn that young people should work to 75 as poor returns from investments in emerging economies such as China mean that many pension schemes are close to bankruptcy.

Douglas McWilliams, the executive chairman of the Centre for Economics and Business Research, will make the call in a speech tonight. He will also say it is time for politicians to stop blaming the country's problems on bankers.

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Mr McWilliams, professor of commerce at the public lecture institution Gresham College, will say poor investment yields will leave pension funds underfunded and mean low payouts.

People starting a job in their 20s today should expect to work until they are 75, argues the former chief economic adviser to the Confederation of British Industry.

He will say: "To retire at close to the standard of living that they have previously enjoyed, they will have to extend their working life and cut their number of years of retirement by working till they are much older. Workers could save more. But they are unlikely to do so and if they did so around the world, they would only add to the glut of savings that is a fundamental cause of the problem."

The Pensions Regulator has been in talks with employers about how to tackle underfunded retirement plans. But Mr McWilliams will say: "Even the Pensions Regulator admits that most pension schemes are underfunded and many will never be able to be fully funded while low yields persist without bankrupting their guarantors."

For those on personal "direct contribution" pension schemes , the yields from annuities, which provide a stable annual income on retirement in return for private pension pots, were "unlikely to rise much from today's very depressed levels".

Mr McWilliams's lecture, Will There Be A Shortage of Spending Power, will be delivered tonight at the Museum of London. He will also claim that Gordon Brown, during his term as Chancellor and Prime Minister, "cost the taxpayer more than 10 times as much as Fred Goodwin and his colleagues in other banks".

"It is time for the politicians to accept their responsibility for creating the national economic crisis," he will say.

Because of likely slow growth in the UK, Mr McWilliams forecasts the UK debt ratio in 2025 will still be over 70% of gross domestic product, when most economists believe that anything over 60% is unsustainable.

He will argue a Chinese savings "glut" was the critical background factor to the financial crisis, by depressing returns on bonds and other investments. Chinese savings have risen from $153 billion in 1990 to a likely $4.5 trillion this year – 25% of total world savings. This, he claims, caused investors to take on even riskier assets in an attempt to improve returns, a move which caused the sub-prime mortgage fiasco.