Speaking ahead of yesterday's second reading of the Pensions Bill, he added that the government and businesses also have a part to play to avert any problems.
"People are living longer, are more active and expect to be able to enjoy the type of lifestyle in retirement they had while working," he explained.
"The state, individuals and employers all share in the responsibility to avert such a crisis - so we must act decisively now to renew the social contract between us."
The Pensions Bill includes proposals to introduce automatic enrolment into workplace pensions by 2012, with employers contributing at least three per cent to a worker's retirement savings.
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