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The Association of British Insurers and the Investment Management Association have written to the secretary of state for work and pensions demanding clarity on "apparant contradictions" relating to personal account contribution caps.

The Association of British Insurers and the Investment Management Association have written to Mr Purnell to clarify remarks that he made at the ABI chairman's dinner on 4 June on personal accounts contribution cap.

Addressing the audience, Mr Purnell said: "We are determined that personal accounts will complement rather than replace existing employer schemes. That is why we put in an annual limit for individuals in the personal accounts scheme of £3600. And that is why we have said there will be no transfers to and from existing schemes to personal accounts."

However, Lord MacKenzie of Luton, parliamentary under secretary of state, told the Lords during the Pensions Bill debate on 3 June: "We have not put the amount of the contribution limit in the Bill, because we want to allow the annual contribution to operate flexibly.

"The wide enabling powers will allow for the higher contribution limit in the first year of the scheme's operation and for a lifetime lump-sum contribution to run alongside the annual contribution limit. We need to consider whether to introduce this additional complexity when the scheme is introduced or wait for the review of the contribution limit in 2017."

Jonathan French assistant director of media relations at the ABI, added: "We have asked for clarification over the apparent contradictions in the two statements, and set out our view that it is vital to the success of pension reform that the existing private pension market is not damaged by personal accounts, which could easily happen if there is no contribution cap."

Michelle Cracknell, strategy director for Skandia, said: "I think that contribution caps are adding to confusion. As soon as you start to put other limits in it becomes confusing.

"There should be only one contribution limit and they should apply to all pensions, to keep it really simple. The biggest danger of auto enrolment through personal accounts is that people do not engage in understanding how much they need to save towards their retirement.

"There could be an issue in the future for people who have not saved enough. The government needs to put more emphasis on helping and encouraging employers to give their employees the necessarily information and education to review their retirement options."