The government needs to act now to minimise the impact its quantitative easing (QE) programme is having on the value of pensions, according to Saga.

Dr Ros Altmann, director general of Saga, claimed that QE has failed in its attempt to boost the economy and has merely resulted in boosting inflation and damaging pensions.

She said: "QE has worsened pension deficits, forcing firms to spend more money on their pension schemes instead of their businesses.

"Well over a million pensioners have also locked into lower lifetime incomes when having to buy annuities at artificially low rates."

Dr Altmann added that buying gilts with newly created money via QE is a "recipe for disaster" as it merely shifts the debts across generations without tackling the underlying problem.

Saga has therefore created a plan to help stimulate the economy without damaging pensions, which includes issuing longevity gilts to help pension schemes match their liabilities and increasing the annual ISA allowance.