After much movement in recent months in the pension and savings area, the Budget could be an opportunity for some much-needed consolidation. Few expect major progress, although more details of the government's approach may emerge.

Pension limbo

The need for a coherent approach to retirement incomes is beyond argument.

If workers cannot be convinced to save for their own retirement and take advantage of the incentives the government is willing to offer them, it is predicted that one in three pensioners could be relying on income support by the middle of next century.

With increasing life expectancies and the 1960s "baby boomers" set to hit retirement age in coming decades the public welfare capacity for the aged will be strained to breaking point.

Recent initiatives have resulted in a piecemeal system that has workers confused about their options, while the latest proposals have yet to be fleshed out.

Nobody can plan for their retirement with certainty and workers, unions, financial institutions and public policy lobby groups all agree this is the single most important step the government needs to take.

A full hand?

Currently, the government has a number of cards on the table, but nobody is sure how they come together to form a hand:

• Lisas are the lifelong individual savings accounts announced by the Treasury in early February. Not a new pension scheme but an "umbrella" account allowing workers to choose from a range of different unit trust and investment fund products and draw them into their own pension savings account. Like a Pep, they offer workers the flexibility to build their own investment, but are designed and regulated for retirement.

• Stakeholder pensions are the government's attempt to extend occupational access to pensions to lower income earners - the ones at most risk of not having enough in retirement. Unions, industry associations and financial institutions will be encouraged to come up with pension schemes for workers who do not have access to an occupational pension.

• Second state pensions will replace the Serps scheme and are designed to give workers a higher pension for their national insurance contributions.

• Guaranteed minimum pensions are the income support safety net for those who have ended their working life without savings to fund retirement. The level will be set at 20% of average earnings.

These add to an already confusing system of occupational and private pensions as well as existing state support which in themselves have multiple variations.

One government, many offerings

But how will the new Lisa concept fit with the stakeholder pension in practice? Both proposals are short on detail and despite both being key government reforms of the pension system, they have been announced separately and with no apparent co-ordination or connection.

This could have much to do with the fact that Lisas are a Treasury initiative, while the stakeholder pension comes from the Department of Social Security. But connect they must.

Will the stakeholder pension be one of the options available as a Lisa? Or will it stand outside the Lisa umbrella?

Waiting patiently for pension enlightenment

Will companies use the advent of Lisas to wind back their commitment to occupational schemes, especially the already-declining, but generous, defined benefit schemes?

And will the stakeholder pension threaten the personal pension industry as workers opt for the more friendly government regulated pension plans rather than those on offer from a private pensions industry tainted by high charges and the mis-selling scandal?

The short term answers may well be no - nothing seems about to happen. The stakeholder pension is not scheduled to bed down until 2002, further divorcing it from present reality for workers.

Meanwhile, the Institute for Fiscal Studies (IFS) believes the stakeholder pension, while increasing access for lower earners, does not yet address the more fundamental problem that these workers do not have enough spare cash to save for retirement in the first place.

And the place Isas, the new individual savings account, have in the bigger national savings picture raises more questions.

Isas are ready to go and set to replace Peps and Tessas on 6 April. But how is an investor supposed to balance this saving option with his or her retirement savings?

Taxing questions

The National Association of Pension Funds (NAPF) has called on Gordon Brown to use the Budget to make a clear statement to make pensions and other savings products easier to understand and take up.

The pension system needs to be ground into a usable form

In particular it wants to see the coordinated simplification of tax rates on all pension, savings and investment options in order that a 'tax league table' can be constructed.

Tax rates should be set, it says, so that everyone can make easy comparisons and the government can push savers towards the options best placed to relieve the burden on the public purse.

All in all, the IFS says Britons are suffering from a lack of "joined-up thinking" in government circles. But given this state of limbo, in one sense it is still too early to rush in to settle the issues.

The public consultation process over the "Pensions in Partnership" Green Paper, which contained the stakeholder, second state pension and minimum pension guarantee initiatives, continues until the end of March.