THE “shockingly lethargic” pace of UK pension reform risks creating a lost generation of people unable to afford to retire, a former pensions minister has warned.

Work and Pensions Secretary David Gauke confirmed the government intended to lower the age for automatic enrolment in workplace pensions from 22 to 18.

However there was fierce criticism after it emerged the change would not take place until the mid 2020s.

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The lowering of the minimum age to 18 will affect 900,000 people across the UK, but the government has put off a start date to avoid a row with employers, who face higher bills.

Around two-fifths of the workforce, some 12m people, are believing to be under-saving for retirement.

To help address the problem, the Coalition introduced auto-enrolment in workplace schemes in 2012 for those aged over 22 earning at least £10,000 a year.

People are able to opt out but very few do so.

Steve Webb, the Liberal Democrat pensions minister in charge at the time, now director of policy at Royal London, said the government’s pension review contained some “great ideas”, including auto-enrolment at 18, but “the proposed pace of change is shockingly lethargic”.

He said: “Talking about having reforms in place by the mid 2020s risks leaving a whole generation of workers behind. Those who never got to join a final salary pension and who have only recently come into pensions through automatic enrolment need urgent action to help them build up a decent pension pot.

“This pedestrian pace of reform risks creating a ‘lost generation’ of people in their late forties and fifties who will simply be unable to afford to retire.”

The government had also been expected to bring 4.8m self-employed people into auto-enrolment in light of the numbers saving into a pension falling by a third since 2001.

However the DWP said it would instead study “targeted interventions” and whether technology could increase self-employed pension contributions.

Mr Gauke told the BBC’s Andrew Marr show there had been “greater saving for pensions since auto-enrolment began, and he wanted young people to get the savings habit.

“People in their twenties have been saving more than I think anyone particularly expected. That’s encouraging. This is building on that success,” he said.

He admitted increases in contributions from next year "might put people off", but added: “The evidence is that opt-out rates have been lower than people predicted."

Darren Philp, policy director at The People’s Pension, said: “Extending pensions cover to younger people in the workplace is exactly the kind of move that we were hoping to see.

“The earlier people start saving, the more investment growth can do the heavy lifting for them in saving for their retirement. It also kick-starts the savings habit from an earlier age.“

The rise of the gig economy, with people working as contractors in low paid jobs, is seen as a growing problem for pension savings.

New research from Zurich UK found a third of gig workers held at least two jobs, with one in seven juggling three or more, with men more likely to have multiple jobs than women.

Although 39 per cent of the 4200 gig workers surveyed across the UK said flexibility and breadth of opportunity lay behind their choice, 21 per cent admitted gig work was the only work they could find, while 14 per cent used it to ease them into retirement.

Uncertainty over pay and no workplace pension were cited as the main drawbacks.

Chris Atkinson at Zurich UK, said: “The benefit of gig work is that it gives people flexibility to boost their income, but it comes without the benefits that full-time employment provides such as holiday pay and income protection. This is why it’s so important there is more support available to gig workers to ensure they take steps to protect their finances.”