Royal London chief executive Phil Loney has warned UK finance minister George Osborne that it would be “reckless” to “take the huge gamble of introducing ISA style pensions.”

Loney said such a move could mean savers might “lose the certainty of a tax relief system which ensures their saved income is not taxed twice.”

He said savers could then be “thrown into an ISA-style system where they need to believe that future generations of politicians will not renege on the deal and tax their savings when they come to withdraw.”

He added: “Hands up anyone who really believes that?”

Loney’s comments came after Royal London, the UK’s largest mutual life, pensions and investment company that employs more than 1,000 in Scotland, presented its new business results for the 12 months ending December 31, 2015.

Royal London said its new life and pensions business rose 40% to £6.77 billion, with group pensions up 27% to £2.8 billion, individual pensions up 39% to £1.92 billion, and drawdown up 67% to £1.3 billion.

Group funds under management of rose 2.7% to £84.5 billion.

“I strongly urge the chancellor to build on his excellent record of introducing the pension freedoms by reforming the current tax relief system and not abandoning it,” said Loney.

“He should not take the huge gamble of introducing ISA style pensions, which would be reckless at a time when the numbers saving into a workplace pension are finally growing, following the successful introduction of automatic enrolment.

“This is not the time to turn the system upside down.”

Loney said that since last year’s UK Budget that Royal London had been engaged in a debate over the future of tax relief on UK pension contributions.

Loney said the critics of the “perceived unfairness” of the current system, where 75% of tax relief goes to high and additional rate tax-payers, had “won the intellectual argument” and that Royal London had “been a leader in calling for change.”

However, Loney said “it has never been true that all of the reform options are better than the status quo.”

He said: “It is my belief that proponents of the ‘ISA-style’ (or ‘TEE’) pension taxation are clearly thinking too short term.

“There remains a considerable risk that ‘ISA Style’ pensions, even with an incentive thrown in, will simply turn people away from long term saving.

“Savers will lose the certainty of a tax relief system which ensures their saved income is not taxed twice, and be thrown into an ISA-style system where they need to believe that future generations of politicians will not renege on the deal and tax their savings when they come to withdraw.

“Hands up anyone who really believes that?”