UK pensions minister Steve Webb has admitted the current “silo” structure of government hampers pensions policy and called for a new department to incorporate pensions, long-term savings and care.

Speaking at an event on retirement savings held by the Resolution Foundation, a think tank, the Liberal Democrat minister said the current and previous governments tended to form pensions policy in silos.

Webb belongs to the Department for Work and Pensions (DWP), which manages policy for trust-based pensions, whereas HM Treasury controls insurance-based pensions, with general savings split among the two.

He also said there was no account for long-term care needs in retirement and the overlap between this and savings.

“We do not see people – we see policies,” he said.

Webb will relinquish his role as pensions minister in the coming months as the government gears up for a general election on 7 May, where the outcome of the current junior coalition party is unknown.

“I do pensions, but I only do bits,” he said. “Do we have an integrated financial product for care and for pensions yet? No, this is partly because we ‘silo-ised’ the policies.”

Webb said it would be more appropriate to put all these issues under a new body called the “Department for Pensions and Ageing Society” – which he said would transfer pensions policy from the DWP, sections from the Treasury and long-term care from appropriate departments.

“Seeing the person and not the policy would lead us to think about what happens in retirement based on aspects that affect the outcome,” he said.

“You could look holistically at labour market trends, and social change like divorce – an example where thinking about social change as part of wider pensions and ageing society allows us to see different bits of government in an integrated way.”

Webb also said government had to get to the point where elderly care and pensions policy was linked together, and where the funding of social care was fixed.

“It seems to me, if we can make auto-enrolment work and make sure people have products for retirement, it ought not to be beyond the wit of man to bring care funding into this,” he added.

The minister, who is unlikely to remain in his current position after the UK election, said how long policy implementation took within government had come as a shock to him.

Throughout Webb’s tenure, he unveiled a raft changes including governance requirements on insurance-based schemes, a charge cap on defined contribution (DC) default investment funds, automatic transfers, an overhaul of the state pension policy and collective DC (CDC).

However, state pension reform will not occur until 2016, and many other policies will only come into force this year, or have yet to be finalised.

“One of the things I have learnt in my current role is how long it takes to do things,” he said. “The new pensions minister needs to sit down right at the start of Parliament and get the forward agenda out and build a sense of focus.”

He said the policy of using auto-escalation to increase employee contributions within auto-enrolment would need to be worked on almost immediately in order to come into action by 2018, as initial employer staging finishes.

Read Taha Lokhandwala’s feature on how the changes to the UK pension system will develop in years to come