Most Royal Bank of Scotland staff are saving 4per cent or less of their salary in the bank's pension scheme despite the bank offering a 15per cent cash or pension contribution.

Carol Young, head of pensions and benefits at RBS, revealed the figures as the industry debated how to respond to the new pensions freedoms which arrive next month.

She said the bank's UK scheme, which has 56,000 members, had low fees and a high employer contribution rate, adding; "It has been possible for members to take out any or all of the 15per cent as cash, and many do. In our scheme which is well-supported with a huge focus on engagement, three-quarters of people are saving 4per cent or less."

Ms Young went on: "The lure of cash is very strong. As we look towards freedom of choice in pensions, we need to look towards how we encourage people to remain invested when it becomes possible for them to access their funds as cash."

Mark Fawcett, chief investment officer of Nest Corporation, told the closing session of the National Association of Pension Funds investment conference in Edinburgh that compulsory annuities had not been suitable for everyone, and there were now opportunities for innovation.

"But we are hearing that people are going to pretty daunted by the opportunities and risks and choices, a bit like crossing a bridge with no guard-rails." He said 99per cent of savers in Nest, the default pension option for those in auto-enrolment, did not make an active choice about their investment. It would be crucial of offer "default pathways" which allowed flexibility for people to access income, but also offered insurance in later life against living a long time.

Ms Young said new investment products were not enough. "Someone will have to take responsibility in assisting the support of members asked to make ever more complex decisions at later stages of life."

She said 4000 members of the RBS scheme would be over 55 on April 6. On the new advice service, Ms Young commented: "There is a real risk that people want to be told what to do, they wasn't something that is very complicated to be made easy for them."

She added: "It is important to help people understand how long they are truly likely to live, and what the consequences of their choices are."

The final day of the conference came as the Coalition trailed its latest proposed reform, a facility for people to cash in their annuities by selling them on.

Mark Wood, chief executive of JLT Employee Benefits, commented that with the exception of people in poor health, " in current markets those trading an annuity are unlikely to end up better off, unless they take considerable risk and achieve positive returns for assuming that risk".

He said annuity trading would be "a retrograde step, ultimately dismantling an important component of pension saving", and would be to the detriment of future annuitants.

Scottish Friendly has called for the issue of formal 'think again' warnings to be issued to customers wishing to cash in all or part of their pension when the new pension freedoms take effect next month.

The savings and Isa provider says that guidance alone from bodies such as Pension Wise and Citizens Advice is not enough to prevent people putting their pension savings at risk. Neil Lovatt, director at Scottish Friendly, said: "Those retirees planning to invest into property are of particular concern as the volatile nature of the market could leave thousands of people penniless if the housing bubble was to burst."