EMPLOYERS and their staff should be compelled to pay contributions to defuse the pensions "timebomb", according to new research by the Institute of Chartered Accountants (ICA).

A survey of more than 1,000 chartered accountants in senior pensions roles found that almost six in ten of those questioned (59 per cent) believed compulsion was a good idea. They represented businesses from small firms to FTSE 100 companies.

Their views are in line with the conclusion of the employer task force on pensions, which warned that firms faced compulsory contributions or higher taxes if they failed to improve the present voluntary system.

Respondents said a compulsory scheme, such as that in Australia, would force complacent employees to take an active role in saving for retirement. It would also remove the disadvantages of those whose employers do not make voluntary contributions.

Of those who opposed compulsion as the way forward, many said it would remove the freedom of personal choice and would not provide the flexibility to take account of individual circumstances.

Terry Cook, the Institute of Chartered Accountants North West regional manager, said: "This survey of people who really know about the state of pensions shows there is much that needs to be done if people are to be able to avoid poverty in retirement."