A leading pension industry body has today suggested that the best way to ensure that the state pension provides a living income in future is to put back the age of retirement to 69.

The National Association of Pension Funds (NAPF) – which represents the interests of employer-sponsored pension schemes and funds – has today submitted a report to the government making the controversial proposal.

The report calls for a basic "citizen's pension" for all of at least £109 per week, as a means of ending pensioner reliance on means-tested benefits and eradicating pensioner poverty.

This would be increased annually in line with average earnings – in contrast to the present system, where the Basic State Pension rises in line with inflation, which has consistently been lower than the growth in earnings in recent years.

But the only way to pay for that substantial increase would be to make people work much longer.

At present, the formal retirement age for men is 65, and 60 for women. This scheme would see 67 phased in as a common retirement age for men and women for around 2030, rising to 69 by around 2040.

NAPF first mooted the proposals three years ago, which were picked up by the Liberal Democrats for their general election manifesto in May.

The report has been submitted to the Pensions Commission, which is due to announce its proposals for reforming the current moribund system – which has seen ten million pensioners pushed onto means-tested benefits in order to survive – in November this year.

The government has made it clear that the Commission's report will only be the start of the conversation about the future of state pensions.

On Monday, chancellor Gordon Brown insisted: "There's going to be no decision on these things until there has been a national debate. When we have the pension commission, there will be a national debate."

Nevertheless, Mr Brown was reacting to suggestions by work and pensions secretary David Blunkett at the weekend that the UK could raise its retirement age to 67, as is being attempted in the USA.

But everyone agrees that something has to be done about the state pension.

"Our research shows that these proposals chime closely with the pension priorities of consumers. People want a simpler, fairer system, which does not penalise women who have taken work breaks, and which does not subject millions of pensioners to means testing", NAPF chief executive Christine Farnish declared.

"The Citizen's Pension meets these criteria, and makes the whole pensions landscape much clearer. The 'deal' from the state is £109 a week. For anything above that, you have to save through a workplace pension or other savings arrangements. There would be an opportunity for government to look again at designing more effective incentives for such savings."

It is certainly true that the current system of eligibility for state pension benefits resting on National Insurance contributions has penalised women, who frequently have interrupted contributions records when they become mothers – and therefore do not qualify for the full benefits.

In addition, it is intended that reliance on private pensions should be promoted much more, in order to "top up" the state-guaranteed minimum.