'More clarity, not choice' says shadow pensions minister

Less complexity and greater financial literacy is what is needed in the pension industry, not more choice, says shadow pensions minister Nigel Waterson.

Bombarding people with more options from an industry they do not understand will not help them save more, he told a debate today on How to engage with pensioners of tomorrow: Making retirement (options) more accessible.

"Everyone is always talking about the benefits of more choice. All evidence suggests people hate choice. It scares them and makes want to do anything else but confront the problem," he says.

Instead the industry must combat a "high degree of financial illiteracy and far too much complexity" especially among young people who need to be persuaded to save for retirement, he adds.

Waterson's comments were echoed by Scott Fulton, associate director investor relations at Just Retirement.

"Most people have no clue what the pensions industry is doing", he said, citing a recent ABI review into the body's Wake-Up packs which suggests as many as two thirds of people who receive it fail to read it.

"Our industry is characterised by innovation but its all going on behind a wall unseen by consumers," says Ben Stafford, policy adviser at the Association of British Insurers.

While gains have been made on the battle ground of terminology to strip out jargon, key concepts are still unclear leaving people unsure about how to find at the best market options for them, the panel said.

"We need information and education. There must be both," says Chris Pond, director of financial capability at the FSA.