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Personal accounts do not provide a sufficient solution to the issues demonstrated by recent pension trends, Jenny Willott MP, shadow secretary of state for work and pensions for the Liberal Democrats, has claimed

Figures from the Office of National Statistics have shown the number of people in final salary schemes is continuing to decline, while the number of members in money purchase schemes has started to stagnating.

Referring to this, Ms Willott said under-saving for retirement in Britain was a "ticking time bomb", as people's faith in saving was eroding.

She said: "Against the backdrop of declining pension scheme membership, personal accounts will not be enough to tackle under saving in Britain.

"The government and industry need to look beyond the introduction of personal accounts as to how we can instill a savings culture in Britain to avoid millions of people retiring without a sufficient income to guarantee a decent standard of living."

The Liberal Democrats have also said that they believe personal accounts represent a "step in the right direction", but the party claimed that the government’s attempts to increase incentives to save for retirement are "totally undermined by its obsession with means-testing".

Chris Holloway, senior adviser for Kent-based IFA Dennehy Weller, said: "The basic idea of personal accounts is a sound one, but the detail is horribly wrong.

"Steamrollering everyone into one type of account could be dangerous. It could even make some people worse off.

"As for instilling a savings culture, if people are already struggling to pay the mortgage and put food on the table, it does not matter what new initiatives you introduce."