Saga urges Government to BOGOF to encourage pension savings

Tuesday 13 October 2015

• Pensions complexity and uncertainty drives away savers • Two-thirds would save more with a simple matched funding incentive • Half would save more if care could be paid tax-free from pension savings

Saga urges Government to BOGOF to encourage pension savings

People are shying away from saving more for their retirement suspicious of future change and confused by the current complexity around pensions.

These sobering findings come from a Populus poll carried out for Saga, to help inform the Government’s consultation on pension’s tax relief

Based on the poll findings Saga has called for innovative Government action to overcome the savings challenge including a ‘Buy One Get One Free’ offer with the Government alone, or jointly with employers, providing the ‘free’ contribution to excite people into saving. 

Ministers should also simplify incentives and sweep away annual and lifetime allowances, provide more information and education and give greater support to employer pension provision.

Saga’s director of communications, Paul Green 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 build greater certainty into the system.”

Populus found that two-thirds of respondents were not currently contributing to a pension even though a third could afford to do so; among those already saving for a pension 8% said they could save a lot more and 45% could invest a little more. 

Yet more than half of all respondents (53%) were worried about their income in retirement with the fear more sharply felt among 18 to 49-year-olds (62%).

The poll found strong evidence that respondents were put off by the complexity of pensions saving.  More than two-thirds admitted they did not understand pension tax breaks and limits on saving and if the tax incentives of pension savings were clearer, a third (33%) of those who could afford to save would save more or start saving into a pension.

Of those who could save more or start saving a lack of trust over future changes was cited by 16% as the reason for holding them back while another 16% said the amount they could save would not be enough to make a difference.  Just over one in six said it was because they did not understand the pensions system.

There has been much debate about changing the tax benefit from when people save to when people take their pension. Whilst making pensions payments in tax free was supported – only 23% of people over 50 believed future Governments wouldn’t change the system.

Paul Green went on:  “We need to help people answer the simple question: ‘How much money will I have in retirement?

“A Pension Passport with every individual having a unique identifier would enable pension schemes  make their records accessible to a centralised database so that pension savers could log on to see all of their  pension information in one place.  Think how that would aide clarity and prompt individuals to think about how much they might need to save to achieve a better life in retirement.

“We also need simpler incentives to save.  In our poll 66% said they would also be more likely to save if there was a Buy One Get One Free offer, where the government or their employer would match every £1 they saved. This was particularly appealing to those aged 18-49, with 73% saying it would get them to save more.”

Other proposals from Saga to the government consultation include a capital guarantee to help reduce consumer perception of risk; greater flexibility to pension savings to enable people to save and pay for care tax free; and, better savings education with a more dynamic role for the Money Advice Service (MAS), Pensions Advice Service (PAS) and private sector partners.

Saga is launching an investment and advice service later this year which aims to help people make the most of their savings serving those whom the big banks and financial institutions have left behind.


Populus polled 2,032 adults between 23rd and 24th September 2015.

Read Saga's response to the Government consulation in full.

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