Dr Ros Altmann has called on the government to reintroduce inflation-linked certificates as pensioners battle the rising cost of living.
The Saga Group director general says pensioners and savers have been the "innocent victims" of recent monetary policy and, while inflation remains well above target, has criticised the lack of action on interest rates.
She believes inflation-linked certificates, which were withdrawn by NS&I last July after proving to be too popular, should be issued to over-50s.
Altmann says: "Savers lose out as inflation erodes their income. If interest rates do not keep up with rising inflation, savers' incomes will keep falling in real terms.
"Government should bring back inflation-linked certificates that will enable those coming up to retirement to protect their future income from the dangers of inflation."
Altmann is also calling on the Bank of England's Monetary Policy Committee (MPC) to "wake up to reality" and raise interest rates in order to prevent a wage-price spiral and a sell-off in gilts.
She adds: "If inflation continues rising, the Bank of England may become powerless to halt the upward price spiral.
"Instead of being ahead of the curve, monetary policy may stay consistently behind the curve, tightening too little, too late, to avoid inflation becoming entrenched in the system."
The Bank's next interest rate decision will come on Thursday (13 January), although the MPC has maintained it at 0.5% since March 2009.
In recent months, Andrew Sentance has been the lone voice on the committee to call for a 0.25% increase in the base rate.
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Former PFS president
Last commission convened in 2002