UK pensions need a major overhaul or people will face a "crisis of expectation", according to two key government advisors.

Alan Pickering and Ron Sandler are the first witnesses to be called in front of the Parliamentary Work and Pensions select committee in its investigation into the UK pension crisis.

Mr Pickering told MPs he would like to see current pension legislation repealed in favour of a new leaner version that would see business red tape cut.

People are expecting more than their pensions can deliver

Alan Pickering

He also said employees and employers should be given incentives to contribute to company pension schemes.

And while he said a universal State pension should remain in place, he warned that people may have to wait longer to collect it.

Mr Sandler told MPs that reform of the savings industry was also necessary in order to restore public confidence.

Both Mr Sandler and Mr Pickering have penned reports on the pension crisis for the government in the past year.

The government's green paper, outlining its plan for the future of UK pensions, is expected later this autumn.

Working for longer

Mr Pickering, the former head of the National Association of Pension Funds (NAPF), told MPs that the State pension should remain a central plank of people's retirement provision.

Government should...create a level playing field

Alan Pickering

"By 2030, a Universal pension of between 20% and 25% of national average earnings should be the goal," he said.

Mr Pickering added that to achieve this people might need to work longer, but gave no indication how much extra time this might involve.

Overall, Mr Pickering denied that Britain's pension system was in "terminal decline".

Great expectations

"If there is a systemic pension crisis it is a crisis of expectation because people are expecting more than their pensions can deliver," he told MPs.

However, when asked whether the government should step in to prevent companies from closing their final salary pension schemes in favour of inferior money purchase schemes, Mr Pickering was unequivocal:

Create an industry that is easier to understand, which offers more simple products in more transparent ways

Ron Sandler

"Government should not encourage a particular type of pension scheme. It should be there to create a level playing field," he said.

He said a key part of creating this level playing field would be reducing the red tape burden on firms offering their employees pension schemes.

As a result, Mr Pickering said that he would like to see the repeal of the 1995 Pension Act which he said was well-intentioned but flawed, as it discouraged business from offering pension schemes.

Public alienated

Ron Sandler, the former Lloyd's of London chief, who reported on the savings market this summer, told MPs that people on low to middle incomes were saving far too little.

He added that many Britons felt "dis-enfranchised" as the savings industry was "too difficult to engage with".

Mr Sandler said reform was vital to "create an industry that is easier to understand, which offers more simple products in more transparent ways, where the consumer can look at one product, compare it with another and make a respectable choice".