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As such, Aegon claims that a combination of a percentage contribution charge with an annual management charge should be introduced.

Steven Cameron, head of business regulation, said: "PADA must give priority to the long term financial security of the personal accounts scheme and a dual charging structure is the best way to achieve this.

"In the current climate people are more risk averse and want to know their money is safe. We can’t afford another crisis of confidence in the savings arena."

The comments come as PADA prepares to publish a summary of responses to its personal accounts charging structure consultation next week (15 July).

Aegon argues that a flat annual management charging structure would put the personal accounts scheme under great financial pressure and could mean charges having to rise in future, more taxpayer subsidy or, in an extreme case, the scheme closing.

It points to PADA’s own analysis and independent modelling by the Pensions Policy Institute which have show that some form of upfront contribution charge is needed to ensure financial sustainability.

Cameron added: "Personal accounts are too big to fail so the taxpayer will ultimately have to step in if things go wrong. To reduce the risk of this happening the charging structure chosen must match when costs will be incurred as closely as possible.

"People who are arguing for stakeholder-style charges for personal accounts really need to come up with an answer to the stability and security points. Does the taxpayer really want to provide ongoing subsidy?"