Saga has urged the government to introduce a buy-one-get-one-free incentive to pension saving.
Saga’s director of communications Paul Green said this would involve the government or the saver’s employer matching every £1 they saved.
Mr Green pointed to research by Populus on behalf of Saga which showed more than two-thirds admitted that they did not understand pension tax breaks and limits on saving. According to the study, if tax incentives of pension savings were clearer, a third of those who could afford to save said they would save more or start saving into a pension.
He said: “The current system of pension saving is like a Heath Robinson contraption, built up and tinkered with over time. Its very complexity acts as a real disincentive to savers.
“It is time for the government to act to excite savers and give them greater confidence in pension savings with more personalised information, and to build greater certainty into the system.”
The Treasury launched a consultation on the tax incentivisation of pensions that ended last month.
Floyd Fombo, chartered financial planner with Bristol-based Rathmore Financial, said: “All the tinkering around with pensions over the years just disincentivises people to save within a pension environment.
“It makes people confused, and whatever changes do happen need to remain in force for the foreseeable future.”