The Association of British Insurers (ABI) has warned the government that more financial advice and less cumbersome regulation is needed over the introduction of stakeholder pensions.
Hundreds of small companies could be fined up to £50,000 for not complying with the government's new stakeholder pensions regulations, which became law on October 8.
According to ABI figures, only 147,000 employers had put a stakeholder plan in place by the end of August. This leaves a shortfall of 400,000 required to designate a scheme, even allowing for the last-minute rush the association is predicting.
ABI deputy director general Stephen Sklaroff said: "As a nation, we need to save more towards retirement. Recent research for the ABI calculated the savings gap now totals £27bn a year.
"Worryingly, some of us save nothing at all. Stakeholder makes a good start in encouraging people to save.
"We believe financial advice is the key and, if regulation can be made less costly and cumbersome, that advice will become more widely available - especially for those on lower incomes."
Shadow secretary of state for work and pensions David Willets has called on the government to allow an extra six months for businesses to comply with regulations. He also recommended a new exemption for companies with five to nine employees "for the foreseeable future". Businesses with five or more staff must provide their staff with access to a stakeholder pension plan.
The Occupational Pensions Regulatory Authority (OPRA), the industry watchdog which will enforce the new laws, said it would commence operating with a "light touch", as thousands of employers failed to meet the deadline.