Workers might be able to access their pension savings before the age of 55 under new government proposals.

The government may reduce the age at which people can take out money from their company pensions to encourage them to save more.

Plans that allow workers to access their pension funds in their 30s could leave them short of retirement funds for their future, according to pensions group.

The National Association of Pension Funds (NAPF) said that giving people the chance to take their money out early may leave more people dependent on state funding when they stop work. Chief Executive of the NAPF Joanne Segars said: “There is little evidence to show that giving people early access would either increase the amount people save, or get them saving in the first place”.

She added: “We think this could be very, very confusing for individuals”.

However, the government believes the proposals could encourage more people to save for their future if they know that they can access their cash earlier if the need arises – currently only those over the age of 55 can dip into their company pensions scheme.

The government said: “Early access is an idea the government is keen to consider. An informal consultation closed on Friday and the government will now make a decision on whether to develop more detailed proposals in the light of the responses received”.

The Director General of the Saga group, Dr Ros Altmann, said: “The problem we have at the moment is people feel, certainly if you are in your 20s and 30s, that by putting money into a pension that money is confiscated from them, because they can’t get it back until they are in their 50s”.

She added: “There are lots of people at the moment who have got tens of thousands of pounds in a pension fund who are having their houses repossessed, because they can’t get the money”.