There will be no state subsidy for the new system of personal pension savings accounts that the government plans to introduce from 2012, according to John Hutton, the work and pensions secretary, who published fresh details on the scheme yesterday.

Grants to help set up the scheme were likely to be needed but would be re-couped through charges to savers, he said in another move aimed at calming the industry's fears that the new accounts would compete un-fairly with, and under-mine, existing pension provisions.