Saga director general Ros Altmann says more must be done to warn some demographics they may be better off not saving into a pension.
At a conference fringe event, she said: “I am worried about people in their 50s, low-paid, maybe renters, who will be the first group of people to retire under this auto-enrolment system, who will have paid a 1.8 per cent up-front charge and who may find their pension savings have delivered them very little.
“We need to make sure we have proper risk warnings in place. I do not see enough talk about who is going to warn those people who should not put money into a pension scheme because it is not suitable for them. We are kind of relying on them knowing it themselves and I am not sure that is the best way forward.”
She said a product needs to be developed which will not be seen as “a locked box” to attract younger people to long-term saving. She said: “Is it possible for the Government to consider creating a vehicle which we do not call a pension where the 4 per cent from the employer and tax relief is locked in but you can have access to the 4 cent you put in?”