Employees could be automatically entitled to take part in company pension schemes under new proposals planned by the government.

The Department for Work and Pensions said it was considering a number of ways to encourage people to save more for their retirement. Increasing membership of company pension schemes was one goal, which could come through automatic enrolment.

One option being explored is the active retirement planner, which would give employees a clearer picture of their retirement income. This would allow them to increase their contributions or work longer if shortfalls were indicated.

The proposals were welcomed by industry bodies, which are concerned that workers are not saving enoug. But the Trade Union Congress (TUC) said the government needed to ensure that firms were compelled to make compulsory contributions.