A key review of UK pension regulations is to recommend a return to compulsory company pensions, according to the Financial Times newspaper.

The report, ordered by former pensions minister Alastair Darling, will recommend that employers regain the right to force workers to join company pensions schemes, the FT reported.

Employers were stripped of this right when personal pension schemes were introduced in 1988.

The move is aimed at reversing a steep decline in the number of people covered by company pension schemes over the last two decades.

The report, drawn up by former National Association of Pension Funds chairman Alan Pickering, will also call for a debate on whether the second state pension should be scrapped in an attempt to simplify the current system.

Shortfall

The full report is to be handed over to ministers later this month.

The review of UK pensions law comes amid mounting concerns that UK workers are not saving enough for their retirement.

Pension fund returns, linked to stock market performance, have fallen steeply over the last two years in line with plummeting share prices.

The lower than expected returns have led many employers to suspend lucrative 'final salary' pension schemes - which offer employees a guaranteed proportion of their final salary on retirement.

The government last year introduced so-called stakeholder pensions - low cost schemes aimed at encouraging more low-to-middle income workers to start saving for their old age.

But take-up of the new stakeholder pension has lagged expectations.