Pensions ''need to be more flexible to encourage investment''

A pensions and savings expert has said the schemes have to become more flexible in order to encourage employees to invest.

Dr Ros Altmann claimed the current structure of the pensions market was not encouraging people to invest, as money is generally seen as being locked away.

She argued that there needs to be more flexible benefits to taking out a retirement savings scheme.

"If there is more flexibility - perhaps a lifetime savings account where at least some can be withdrawn if needed - then more people may contribute," Dr Altmann said.

She said employers were considering using Isas in employee benefits packages as an alternative savings model.

Research published by PricewaterhouseCoopers this week indicates that 69 per cent of businesses are unaware of the potential financial cost of an auto-enrolment pensions scheme.

The Centre for Policy Studies has recommended an automatic inclusion scheme for retirement savings in order to stave off a pensions crisis.
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