A universal flat rate pension payment system should be introduced to avoid means testing.
Means tested benefits could be affected by new pension reforms.
The government will face a major 'mis-selling scandal' if it does not simplify the new auto-enrolment pension system planned for next year, according to a pensions group.
Under the proposed system employees will be automatically enrolled into their company pension schemes from 2012. Employers who do not have a pension scheme will have to enrol their staff into the National Employment Savings Trust or Nest.