The Association of British Insurers, or ABI, has warned that the UK government's new initiative to encourage people to save for retirement must not be allowed to interfere with good pension plans that already exist.

Under government proposals, workers will automatically be enrolled into a National Pension Savings Scheme. While the details of the new scheme are still at the planning stage, Reuters suggests that workers are likely to be required to make a contribution of at least 5% of earnings above GBP5,000, with employers making a similarly structured contribution of 3%.

However, the ABI stressed that the so called ‘personal accounts’ should be aimed at people who are saving little or nothing, and that it should not be allowed to damage existing employer contributions.

Some employers already offer generous pensions packages, and it is these that the ABI is keen to protect.

According to ABI, personal accounts have the potential to open up savings for millions of people, and there is great public support for both a mandatory employer contribution and automatic enrollment into the scheme.

The association also warned the government against introducing a cap on pension charges, saying that the actual level of charges could not be accurately predicted as it would depend on the number of people participating in the scheme.