MPs should set an example by giving up their generous pension scheme as the country faces a growing crisis on the issue, Lord Turner said today.

The head of the Government's Pensions Commission said it would be "very difficult" for politicians to impose curbs such as a rise in the state pension age on voters while keeping their lucrative final salary scheme.

Lord Turner said he believed there was also `an issue' about the Government's deal under which existing public sector workers would keep the right to retire at 60.

He said: "Public sector workers' life expectancy is going up as fast as everyone else's."

Lord Turner said he thought his proposal to raise the retirement age to 68 or 69 would win public support in the end, despite its current unpopularity.

He admitted that the commission's suggestion that pensions should be based on residency rather than contributions would depend on introducing a compulsory identity system.

"You don't need to have an ID card you carry around, but you do need an identifier that says this person in this year is resident in this country."

He also conceded that the plan to create a new pensions scheme, into which employees would be automatically enrolled unless they opted out was "a form of tax" on business.

But he said the cost would eventually be handed on to individuals though the wage packet.

Lord Turner said he had been surprised by the intensity of discussion surrounding his report.