One of Scotland's leading pension companies has warned that the chancellor's radical reforms could become "an infamous example of political bungling" unless people are offered affordable financial advice.

Phil Loney, chief executive of Royal London, said Mr Osborne's freeing up of pensions for over-55s from April was potentially a famous achievement but was in danger of being undermined.

He said fresh political will was needed after the election to create a new "retirement advice" regime, enabling specific advice to be offered at a cost of around £200 instead of £1000 as at present.

Royal London has revealed that there was a take-up of less than 2per cent in the final quarter of 2014 to an invitation to customers approaching retirement to consult The Pensions Advisory Service (TPAS).

Mr Loney said: "Of those customers without an adviser we found that surprisingly few people took up the offer to speak with the TPAS experts. Of the 3,600 letters we sent out in the final quarter of 2014, only 71 customers made contact with TPAS."

The government had now unveiled Pension Wise as its new service, but Mr Loney went on: "Because the thing has been rushed to market, we sit here seven weeks before we are supposed to go live and we don't have a telephone number for Pension Wise, we don't have a description of what the guidance service is going to look like and what it's going to produce."

He said the firm was working with the Pension Wise team on different signposting techniques but said: " I remain to be convinced that a new leaflet with a new logo, and a publicity campaign will dramatically improve response rates anytime soon. Meanwhile Citizens Advice report that they will only have a very limited capacity for face to face guidance in place for April."

The Financial Conduct Authority has recently told pension companies they must quiz customers on their tax and benefits position, and issue risk warnings about taking pension cash. Mr Loney said: "We believe that this belated intervention will not solve the problem. Most people have no idea how close they are to the next income tax threshold, or how the detail of means testing for welfare benefits works."

He said without a regulated but affordable advice regime being a high priority for the next government, "there is a very clear risk that many over-55s will make inappropriate decisions which land them with an unnecessary tax liability and an inadequate income to live on".

Royal London, the biggest pensions mutual and until last year branded in that sector as Scottish Life, was unveiling a 39per cent uplift in new life and pensions business for 2014, driven by a rise of 83per cent in group pensions as auto-enrolment continued.

The company was the most outspoken critic of the government's charge cap on new company schemes, eventually set at 0.75per cent, claiming it would spark a rash of fees levied on employers instead. Mr Loney admitted that this was a danger only if the cap was lowered to 0.5per cent. "Where we are at the moment is sustainable," he said.

The company has launched a direct to consumer insurance arm with an over-50s plan, in a direct challenge to market leader Axa whose Sun Life policy is promoted by Michael Parkinson.

Mr Loney said: "This is a market that is dominated by the likes of Axa and we are entering with much better value for money and much lower margins."

He said that as a mutual, Royal London was able to "invest time and effort in making sure our propositions are right for their market over the long term without the pressure of shareholders".