High street banks,, life insurance companies and City fund managers are will be given responsibility for setting up and eventually running the Government’s proposed low-cost national pensions savings scheme.

Pensions minister James Purnell said top executives from the financial services industry will be recruited to a proposed “delivery authority”.

Its job will be to establish the system of so-called personal accounts, in which up to 10m employees will be automatically enrolled, with their employers compelled to contribute.