Saga director general Ros Altmann says more must be done to warn certain people they may be better off not saving into a pension.
Speaking at a fringe event at the Liberal Democrat conference in Birmingham, she said other savings vehicles may be more appropriate for some sections of society.
She said: “I am worried about people in their 50s, low paid, maybe renters, who will actually be the first group of people to retire under this auto-enrolment system, who will have paid a 1.8 per cent upfront charge and who may find their pensions 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 actually 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.”
To attract younger people into long term saving,she says pensions must not be seen as a “locked box”.
She said: “Maybe it will have to be in the 2017 review, I would prefer it to be earlier, but is it possible for Government to consider creating a vehicle which we do not call a pension because that is not a very popular word, but 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?”
British Chambers of Commerce director of policy Adam Marshall says: “The hope would be young people would not touch their 4 per cent, but it seems the practice and culture among many young people makes that unlikely.”