It believes the government's analysis is seriously flawed because it focuses only on the extent to which the workforce is covered by conventional pension plans, ignoring the substantial wealth invested in other assets, especially property.

New figures compiled by the Irish Brokers Association show that many people have turned their backs on pensions, with just 18% of the money earmarked for retirement invested in traditional pension plans. The vast bulk . . .

some two-thirds of total retirement savings . . . is invested in property, including people's homes. Another 17% has been ploughed into other savings and investments.

"We seriously question the validity of the data used to demonstrate that pensions coverage is a serious problem in Ireland, " said Pat O'Sullivan, financial services director with the IBA. "Our survey shows that consumers are actively planning for retirement, albeit not through the traditional pension route."

Social affairs minister Seamus Brennan favours compulsory saving as the best way of extending the pensions net to an estimated 900,000 people with no private cover.

But O'Sullivan disputes the true scale of the problem.

He believes that most of these people will be able to made ends meet on the state old-age pension, currently 193.30 a week, while many others are immigrants who will have returned home long before retirement.

"I wonder how many people who have no formal pension in place are actually planning in a different way for income replacement for their retirement, " he said. "Surely the boom in investment property in recent years, both at home and abroad, is one such example."

The government must look at the broader picture before resorting to drastic measures such as compulsory pensions, which would be resented by workers as just another form of tax, according to O'Sullivan.

Rather than worrying about coverage, the government should pay more attention to the adequacy of pensions already in place, he said. Thousands of workers have been lulled into a false sense of security by signing up for pensions without realising that they will provide only a paltry income in retirement unless they review their contributions regularly, O'Sullivan added.

The IBA survey is based on interviews with 125 clients of its member firms. The average age of participants was 50 and 69% were PAYE workers.