Pensions need a radical revamp, and even a new name, to make them less “frightening” and more attractive, the director-general of Saga has urged.
Schemes could also be made more flexible as people are being put off saving anything at all by the “stark choice” they face of either locking their money out of reach or not taking out a pension, Dr Ros Altmann said.
Speaking as the Government prepares to begin its scheme to automatically enrol up to 10 million people into pensions from next month, Dr Altmann said that much of the language used around pensions was “alien” to many people.
She said: “I would like to find a new word for pension – lifetime savings or retirement savings – something that does not have negative connotations.”
She argued that people often associated the word “pension” with scandals and disappointments, or something which was of relevance to older people only.
Dr Altmann said pensions were seen as “final and quite frightening” by many people.
From October 1 the largest employers, those with 120,000 or more workers, must place eligible employees into schemes, with smaller firms gradually being enrolled in a staging process which will end in 2018.
High living costs and low wage increases are placing intense pressure on the amounts of money people have left over after paying regular bills and placing a strain on people’s abilities to save.