The Government's Lifetime Isa scheme is in chaos as not a single high street bank is offering the accounts, amid fears it could result in a mis-selling scandal.
Despite officially launching on April 6 just three providers have agreed to offer the accounts, one of which was last night accused of ripping off savers by charging "disturbingly" high fees.
Daily Telegraph calculations reveal that the Share Centre's Lifetime Isa will leave savers as much as £60,000 worse off than they would be if they save the same amount into a company pension over the course of 30 years.
The investment house is offering savers a choice between three investment funds which charge fees of between 2 and 2.1pc.
The charges are three times higher than the Government's maximum legal charge cap on workplace pensions, which sits at 0.75pc.
Baroness Ros Atmann, a former pensions minister who has previously said the Lifetime Isa should be scrapped as they could lead to a mis-selling scandal, said: "These charges are deeply disturbing in my view, and are another reason to rethink the whole idea.
"Problems have surfaced already and the product isn't even launched yet. Young people deserve better than this and the Treasury is letting them down badly with this complex, expensive product that is likely to be worse for them than pensions."
The calculations are based on someone investing £4,000 a year, receiving a 25pc bonus and making 5pc annual returns.
A saver being charged 2.1pc a year would be left with £240,782 after 30 years, compared to £304,714 under a 0.75pc charge.
Over five years the difference in fees amounts to £4,577.
The Share Centre defended its fees, saying the investments known as "funds of funds" were a good value option for savers who didn't have time to do their own research.
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The accounts, also known as "Lisas", can be opened by people aged between 18 and 39 to save for their first home, or their retirement, in the same pot.
They can put away up to £4,000 each year and receive a Government bonus of up to £1,000 a year on their contributions until they turn 50. Funds can be withdrawn tax-free to buy a first home or saved for later in life.
Darren Cornish, director of customer experience at the Share Centre, said: “Funds of funds invest in a range of funds from well-known investment houses. As such, they tend to have higher costs associated to them.
"They are a good option if you don’t want to spend your spare time doing the necessary research to construct such a portfolio. We are confident that in this respect, our ready-made funds offer good value for money."
Sources in the pensions industry have claimed the Treasury is so desperate for the Lifetime Isa to succeed that officials are calling providers every week asking if they will be offering it.
Two other providers, Hargreaves Lansdown and Nutmeg will also offer Lifetime Isas.
A Treasury spokesman said: “We have always been clear that the Lifetime Isa is not a replacement for a pension. We fully expect the provider market to grow throughout the year as providers put their systems in place and develop their products.”