Personal accounts will only result in limited savings

According to the study of figures from 2001 to 2005, there were 8.6 million people who had, in at least one of those years, not been able to join their employer's pension scheme.

However, the IFS calculated that their average accumulated savings into a personal account, before any investment return, would have been just £2,820 during those years.

The study also found that in 2005 there were 4.7 million people - equivalent to 15 per cent of the working population aged over 22 - who had not been offered the chance to join a pension scheme run by an employer.

Of those, 3.7 million, had made no alternative pension provision.

Meanwhile, half of those employees not contributing into a private pension earned less than £14,000, and more than half had no net savings, according to the report.

Matthew Wakefield, senior research economist at the IFS and one of the authors of the report, said: "Getting such individuals into pension saving might be seen as a success of the policy, but any increase in pension saving is, at least in absolute terms, likely to be small.

"While many of these individuals have little scope to finance new pension saving by reshuffling existing assets, some could pay down existing debts less quickly, which would still mean that new pension saving was not new saving overall."

Responding to the report, an Association of British Insurers (ABI) spokesman said: "It is vital that the new system of personal accounts is implemented properly - as the IFS report says, this will be essential to get people to save.

"The report shows that the lowest earners will dip in and out of pension saving, so such people must have more than just the proposed 30 days in which to decide whether they should remain auto-enrolled.

"The government could also give the whole system a kick-start by allowing willing employers to automatically enrol their employees into existing good workplace pensions as soon as possible."