The government should form a new department to incorporate pensions, long-term savings and care, according to pensions minister Steve Webb.

A new body, the Department for Pensions and Ageing Society, would transfer pension policy from the Department of Work and Pensions (DWP), sections of the Treasury, and long-term care from appropriate departments.

Mr Webb, who was speaking at a think tank event on retirement savings held by the Resolution Foundation, said previous governments tended to form pensions policies in silos.

He admitted the current "silo" structure of government hampers pensions policy, saying: "We do not see people – we see policies."

"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.

Mr Webb, a Liberal Democrat MP, belongs to the DWP, which manages policy for trust-based pensions. He will relinquish his role as pensions minister in the coming months as the government gears up for the general election on 7 May.

Describing how a new department would work, 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."

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, he added.

"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 said.

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

"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-iced' the policies."

First published 19.02.2015

Lindsay.sharman@wilmington.co.uk