The UK government is looking at a hybrid national pension savings scheme that would incorporate both Lord Turner's recommendations and a model put forward by the insurance industry.

A new national savings scheme to replace the decline in company pensions is a key proposal of the pension commission. The government is still deciding whether it will accept such a scheme or who would run it, but at a private meeting the Department of Work and Pensions outlined a model which would see a government agency collect contributions but allow the employee to choose the pension provider.

Lord Turner had recommended that experts would choose the providers from competing fund managers to keep down costs. Pension experts have warned that allowing the employee to make the decision would increase costs and force people to make decisions that they are not equipped to make.

The Association of British Insurers, the trade body that represents UK insurance companies, supported the idea. The association said that the model would give the insurance industry a role and build on the expertise and infrastructure already in place.

However, consumer groups such as Which? want to see an independent body running the scheme rather than the private sector. Research conducted by the association found that only one in nine people would trust a financial institution to look after their money and two in five would have most trust in an independent body.