The government's plans to limit charges on pension schemes used for automatic enrolment have been labelled "not fit for purpose" in an official report.
The Regulatory Policy Committee said the Department for Work and Pensions' regulatory impact assessment was not up to scratch.
The committee said the evidence presented does not adequately demonstrate why setting a charge cap is considered to have a zero net impact on the pensions industry.
Tom McPhail, head of pensions research at Hargreaves Lansdown, explained: "The DWP conducted this consultation in a tearing hurry, in fact they rushed it through so quickly that they failed to conduct their regulatory impact assessment properly.
"This means that the entire consultation process is now in doubt and will probably have to be rerun. If the impact assessment figures were wrong then everyone involved in the consultation including employers, pension providers and the DWP’s own officials will have to reconsider their conclusions from the consultation.”
He added: “This will almost certainly mean a delay in the introduction of any charge cap on pensions, if one is introduced at all.”
Darren Philp, head of policy at The People’s Pension, said the government had been shown "the red card".
"This was a consultation that lacked detail and was built on sand. The government now needs to rethink and pick up the gauntlet thrown down by the recent Office of Fair Trading report to improve transparency and comparability across pensions.”
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