George Ladds, head of pensions at Fair Investment Company, comments on the Government's call for evidence on allowing early access to pension savings.
"I have long called for a simpler pension system that makes saving easy and relevant, and have previously said what I would like to see is ISAs and pensions combined, so I am glad to see one of the Treasury's proposals is for just that.
"The call for evidence has put forward four possible options for how private pensions could be more flexible, and as far as I am concerned, the only model that could make a real difference to pension savings is the feeder-fund model, which proposes creating a more flexible savings products linking liquid savings products (such as ISA) and pension savings into a single account.
"The loan model could be very dangerous, and could easily see people get into debt rather than save more, while the permanent withdrawal model could see people exhausting their pension funds early and create a minefield of tax complications. I think the early access to the 25 per cent tax free sum could work, but I don't think it is enough on its own.
"The model which fits closely with my ideas of an ISA/pensions blend is the feeder-fund. At the moment, young people can't see the benefits of saving for something so far off into the future and think it is irrelevant to them. Many don't understand pensions or think they are too complicated and others may think they can't afford to give any significant amount of their salary up in order to pay into pension.
"But it is important to try and encourage people to understand that saving for retirement is vital if they are to ensure they don't end up having an impoverished standard of living in their old age. One way of doing that is through more simple, flexible and relevant options, like ISAs.
"Allowing these simpler savings vehicles to be combined with a pension, and allowing access to funds under certain circumstances (i.e. a house deposit) would make pensions much more relevant to young people and give them the encouragement they need to save for the future.
"Our intention is to provide a more detailed response to the consultation in due course."