Savers without adequate pension savings at retirement could benefit from a framework that allows them to choose when to spend, while still maintaining a base level of pension savings, industry experts have suggested.

Speaking at the Pensions and Lifetime Savings Association(PLSA) Annual Conference 2022, Now Pensions head of defined contribution, Stefan Lundbergh, said that such a framework could also give greater flexibility for savers at retirement.

The suggested solution could allocate extra funds for specific years of retirement depending on the member’s preference, whilst maintaining a base level of pension savings through the state pension every year.

Lundbergh stated that retirees “have the greatest asset in the world" in the state pension, in turn allowing other private pension savings to act as a “top-up”.

He also explained that retirees could choose the way in which they spend their “top-up” pension savings, highlighting a “smile” pattern of spending, which prioritises more money at the start of retirement and later on, and a “smirk” pattern, which prioritises extra money at retirement but quickly levels off.

“When you retiree you can pick between these profiles and ask what fits you. What do you want to do with the money that you have," he stated.

Now Pensions head of defined contribution, David Bird, suggested that solutions such as this could also help address some of the perceived problems surrounding pensions, such as the industry having a “bad saviour complex”.

Bird explained that “as an industry, we have a tendency to think that we can solve all the problems in the world”, arguing that this attitude was not feasible for someone who has reached retirement with less savings than they need, as “it’s too late to save more”.

Bird stressed that the main question for members that could be addressed by future solutions is “how can I make the most of what I’ve got”.

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