Steve Webb has called for the pensions industry to encourage people to ‘impulse save' alongside the more rigid auto-enrolment framework, to engage with younger generations.
Speaking at a National Employment Savings Trust Forum, the pensions minister said: "I can't help wondering whether we've become terribly sober about pensions saving - it's got to be structured and advised and regulated and in line with the tax provisions and inflexible."
He said a new generation of savers behaved differently and pointed to a Friends Life report which suggested allowing savers to top up pension contributions at cash points to improve saving rates.
"Can we do this?" he asked. "Why can't we go with the flow? If somebody looks at their bank balance and it's a bit low then we don't even go there, but if there's a bit more than they thought, a prompt to top up their pension with a smiley picture could come up."
Webb added that the government and the industry should not try to scare people into saving more.
"If you terrify people, then yes they might start saving more, but it's more likely they'll just get back under the duvet," he said.
Webb said the best way to make messages about pensions stick was to talk about when people wanted to stop working rather than pot sizes and retirement incomes.
"The answer might be you've got work to 87 to have the standard of living you want given your current saving, but this is what you can do to bring that forward," he said. "People grasp that more than they understand an arbitrary financial figure."
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