Tories would relax pension rules

Speaking at the FT Intermediary Forum at The Cumberland Hotel in London on Tuesday, Ms May, shadow secretary of state for work and pensions, said the aim of a Conservative government was to get people saving for the future.

While applauding the aims of Personal Accounts, Ms May said she had concerns about the way the schemes were set to be implemented.

She said: "Many people could be encouraged to save in personal accounts and could find it was not worth it because of means testing

"Personal Accounts could potentially lead to people turning around to government and saying 'You said if I saved in this vehicle I would be okay in retirement and I am not. What are you going to do about it?"

Ms May said the Conservative party has long been an advocate of automatic enrolment and believed early voluntary adoption could help employers plan.

She said: "It is disappointing that the government is not investigating this.

"If we win the next general election we will review the implementation of Personal Accounts as a matter of urgency."

She acknowledged the solution to this may not be pensions alone and she was currently looking at models that would allow "early access" to pensions.

Ms May told an audience of IFAs and pension providers at the event that any system a Conservative government would adopt in the UK would have to have safeguards in place to make sure savings were only accessible when truly needed.

Recognising the need for greater flexibility in retirement income solutions, Ms May also said a Conservative government would end the obligation to buy an annuity at the age of 75.

She also said a Conservative government did not wish to just give up on the concept of final salary schemes.

Ms May said: "One of the issues is tying up money. We are looking at Kiwi saver and 401K and looking at whether things there could make saving for the long-term more attractive.

"It would be easy to give up on final salary schemes but we should not give up on the concept in its entirety.

"Many employers feel employees are unhappy taking on all the risk. We are looking at action for employers to salvage some form of defined benefit scheme. We are looking at how the regulatory system could encourage hybrid schemes."