Workers risk missing out on essential financial advice if Steve Webb's small pot pension plan goes ahead, Aegon has warned.
Yesterday, the pensions minister proposed a consolidation method where a pension pot would follow a worker as they moved from job to job.
Kate Smith, regulatory strategy manager at Aegon said it was disappointed the idea of a virtual aggregator had not been backed by government.
She added: "We do have concerns that achieving one single ‘big fat pension pot' by automatic transfer, instead of by using professional advice, could lead to some customers being disadvantaged.
"Restricting automatic transfers to those from automatic-enrolment schemes mitigates this risk, as does a cap on the amounts which can be automatically transferred.
"Professional advice needs to be part of the solution for all but the smallest of pension pots. However, we do recognise that accessibility to advice will be an issue for many people. Above certain levels, advice is definitely to be recommended."
Consumer groups such as Which? and Age UK said the plan would put people at a disadvantage if they transferred into a scheme with poorer governance or fee structure.
Gregg McClymont, shadow pensions minister, said the strategy was not the best deal for savers.
"Ministers must put the saver's interest at the heart of what they do. Steve Webb's proposals on small pots fail this test. The government's statement could misleadingly give the impression that they have widespread support for their proposals - they do not."
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