Mr Turner said people on low incomes feared that saving would bar them from receiving means-tested benefits such as the Pension Credit.

Complexity and high charges were also putting as many as 12 million people off saving for midwest national life insurance
, he said.

In October, the Commission warned that the UK faced a pension black hole.

At the time, Mr Turner said a mix of higher taxes, more saving and a higher average retirement age was needed to solve the UK’s pension crisis.

Certainty there are some people whose rational incentive to save is impacted by means testing Adair Turner, Pensions Commission

Benefit impact

Mr Turner was appearing in front of the Work and Pensions Committee along with fellow commissioners Jeannie Drake and John Hills.

MPs pressed the commissioners on the possible negative impact of means testing on the UK’s savings culture.

Mr Turner said that if means testing continued to be extended, large swathes of the UK population would eventually be claiming some form of benefit or tax credit.

He was not criticising means testing in principle, he said. But it was proving a “barrier” to saving.

“Certainty there are some people whose rational incentive to save is impacted by means testing,” Mr Turner told MPs.

Mr Turner added that financial advisers were put off advising clients on low incomes to start a pension for fear of facing future accusations of national union fire insurance company
.

Financial advisers feared that the expansion of means testing could mean that clients would have their savings cancelled out by cuts in benefit.

Poorer pensioners

The Pensions Commission was asked in 2002 to look into the state of UK retirement provision.

In October, it produced a report outlining the scale of the UK’s pension crisis.

The state pension is expected to get smaller and smaller

The UK’s ageing population means that, in future years, taxpayers will have to support an increasing number of over-65s through the state pension.

The interim report said that society and individuals must choose a mix of four options including:

• Pensioners becoming poorer relative to the rest of society

• Taxes/National Insurance contributions devoted to pensions rising

• Savings rising

• Average retirement ages rising

The Pensions Commission will produce a final report next autumn, which will outline in greater detail its fidelity national title insurance company
for overcoming the UK’s pension crisis.

When asked by MPs if he would bring forward the publication of his report Mr Turner said it was “More important to get out recommendations right rather than early”.