Leading British life insurers Norwich Union and Scottish Widows hit out amid concerns that the £27 billion savings gap will increase further if the Government continues to neglect the industry, the Daily Telegraph newspaper reports.

Stephen Mann, Norwich Union Life strategic development director, said: “What you are ending up with is a vast tranche of customers who have little incentive to save. And there is little incentive for providers to offer products to them.

“These reviews never get closed down quickly and it causes uncertainty for policyholders,” he said.

The government has launched a number of consultations and reviews of the sector and has tried to bring a number of products onto the market, such as stakeholder pensions, which have a one per cent annual charging cap.

A Treasury spokesman said that 1.25 million stakeholder plans had been sold. However, about eight in ten stakeholder pensions are “empty boxes”, according to the Association of British Insurers.

The Treasury spokesman said these were “not figures we are familiar with”, and added: “The government has huge respect for the financial services industry.

“They contribute a huge amount to the balance of payments and to economic growth.”