by business editor Trevor Sturgess

Further cash injections into the economy will inflict more damage on pensions, a Saga chief has warned.

Dr Ros Altman, director-general of the Folkestone-based provider of holidays and financial services for the over-50s, said it was time the Bank of England examined what so-called quantitative easing (QE) was doing to the economy.

The Bank is widely tipped to announce on Thursday (5) that it is pumping a further £50bn into the economy, taking the total spend to £375bn. The practice has been dubbed “printing money.”

QE has kept interest rates low and forced pension providers to slash annuity rates for more than a million pensioners. Dr Altmann says it has been done without any proof that it is achieving its aims of stimulating growth and jobs.

She claims that through its impact on pensions and pension funds, QE has actually damaged growth.

The Bank had failed to produce evidence that the policy had worked, relying on “unprovable” assumptions that the alternative to QE would have been economic meltdown.

“Conjuring up a further £50bn of new money, in order to buy government debt at unprecedentedly expensive levels could be saddling future taxpayers with large losses when long term interest rates return to levels that reflect our economic fundamentals in the future,” she said.

“Given that we are in a double dip recession, bank lending is falling and lending rates have been rising, it is far from clear that QE is the right policy to get the economy going.

Given the damage it is doing to pensions, I would urge caution and careful consideration with a balanced analysis of how the policy works.

Distorting the gilt market is dangerous, it undermines our pension system and has side-effects that actually damage growth.

This policy may seem to make sense in academic models, but in the real world, with our ageing population and pension system that is underpinned by gilt yields, QE simply may not work.”