Ministers need to design simple, affordable and secure savings solutions for young people if they expect to restore public confidence and sort out the pensions crisis, according to new research from the National Consumer Council.

The research shows that young people have little confidence that their saving will pay off, and their trust in government on pensions is so low that any moves to force them to save for retirement would be unpopular.

Malcolm Wicks, pensions minister, told ePolitix.com: "I recognise that there are many reasons why people don't save, as the NCC research shows. For others it may be confusion or misinformation that is putting pension saving off till another day.

"Good pensions mean partnership. Government and employers both have a vital role. But people in their 20s and 30s must take personal responsibility for their financial future - and the government is committed to supporting them in this by providing flexible products like stakeholder pensions and making sure young people get the information they need to make informed choices.

"A pound spent on a pension in your twenties is worth far more than a pound spent twenty years later - saving today can go a long way in the future."

Forum Response: National Consumer Council

Chairman Deirdre Hutton said: "Thanks to the recent decline in good quality occupational pension schemes, low returns for savers, and the dwindling purchasing power of the state pension, government policy requires young adults to start saving for retirement earlier than their parents.

"But the reality is that this is not happening. Only one in every three under-30s is putting money aside for their old age. A no-nest-egg generation is emerging.

"Our research sheds light on why. Young people are aware of and unsettled by the pensions crisis, but they are suspicious of solutions that mean they must make big sacrifices today with no guarantees that this will bring them any real benefit tomorrow.

"Lack of trust in the pension providers - government, employers and the pensions industry - shines through as one of the reasons for their reluctance to save more. But just as significant among those we spoke to is a lack of spare cash to save.

"Many young adults are struggling to pay for their day-to-day living expenses, while trying to keep up repayments on loans and credit cards. For those on the property ladder, the responsibility of a mortgage is often perceived as a better investment towards their future. Those with children have other financial priorities on their hands. Pensions are seen as a burden too many.

"Above all, a simpler and more stable state pension structure is vital if young people's confidence in pensions is to be restored, allowing them to make informed saving decisions."

Forum Response: Association of Retired and Persons Over 50

Don Steele, director of social policy, told ePolitix.com: "The trouble with pensions is that there is no simple answer. I know its trite to say that but there really isn't.

"I don't think younger people can be persuaded. I think that the government needs to do much better than they are at the moment.

"At the present time, the average wage is just over £20,000. A young person needs to invest £300 per month in their pension in order to get two thirds of final salary on retirement.

"Now not a lot of people either want or can afford to do that. Many of them are just starting their first mortgage and have student loans to pay back. The last thing they are thinking of is pensions.

"The government is trying to bring about what I think is quite an incredible switch. The position now is that 60 per cent of income in retirement is paid for by the state and 40 per cent from other sources. Ministers want to switch this and have 60 per cent provided by private pension and 40 per cent from the state.

"There are some of us who think this is impossible to achieve. Occupational pensions are decreasing in number rapidly and people are being switched to personal payment schemes where they take the risk rather than the company.

"As far as private pensions are concerned, I have described this industry as a 'one armed bandit.' Others have described it more politely. I read the other day someone talking of the 'economics of the casino'.

"But we are talking about a gamble. If you're lucky, you'll get a good return and if you're unlucky - as many people are - you'll be very lucky to get your money back.

"So people can be encouraged but they are not stupid. They see that the end product is simply not there.

"In our view the only answer to this is to completely rethink the state pension. We need the most radical reform of state pension that we've ever had in this country.

"It began with a national insurance scheme - which at the moment has a surplus of £31 billion and is being redirected towards the NHS. But instead of just having this fund, we think that there should be some sort of twin scheme between the private sector and the state.

"To have a properly funded pension scheme which the state underwrites. I know this sounds a bit ambiguous but it is an ideal to which we could aim.

"Then people could be sure that when they do come to retire, they will have a set amount of money that they know about. It will be a guaranteed income. At the moment people do not know what their income in retirement will be."

Forum Response: Age Concern

Gordon Lishman, director general, told ePolitix.com: "This research is further evidence of the need for a radical overhaul of the pension system.

"Two million older people currently live in poverty and many younger people risk the same fate by failing to save.

"Our research shows that younger people would rather pay off debts, invest in property or put money into other types of savings, rather than a pension.

"The government must re-think its pensions strategy and improve the level of the basic state pension, otherwise tomorrow's pensioners will be no better off than today's."

Forum Response: Help the Aged

Mervyn Kohler, head of public affairs at Help the Aged said: "The government has promised action on pensions and personal savings 'in due course'; a promise that seems to hold no particular urgency.

"If younger people are to have a decent opportunity - or even the inclination - to save for an income in retirement that is better than barely adequate and confusing state provision, it is vital that we confront the decline in the personal savings and pensions sector, and confront it now."