The boss of Royal London, the UK’s biggest insurance group owned by its members, has expressed caution about Labour’s ambition to use pensions to drive economic growth, as he warned of a “ticking timebomb” and urged the government to make greater saving for retirement a priority.

The chancellor, Rachel Reeves, is launching a landmark pensions review, and pledged a “big bang” for private pension funds, as the government wants to unlock billions of pounds to invest in UK infrastructure and housing.

However, Barry O’Dwyer, the Royal London chief executive, expressed reservations on Friday. “With an estimated £3tn invested in UK pensions, it is understandable pensions are viewed as being able to play a powerful role in supporting UK economic growth,” he said. “However, it is important to remember the primary role of pensions is to fund customers’ retirement.”

A taskforce of industry executives and ministers will propose ways to cut costs and improve investment options, allowing retirement scheme managers to boost pension pots by up to £11,000. The taskforce will also consider making it easier for pension funds to broaden their investment strategies to include a larger slice of UK businesses.

O’Dwyer said on BBC Radio 4’s Today programme: “In so many ways, we want what [the government] want. They want savers to get the best possible returns. They want to tackle the barriers to pension schemes investing into UK productive assets. That’s all music to our ears.”

However, he added: “Where we might want to go further and faster is to get people saving more for retirement. Four in 10 people of working age aren’t saving enough. It’s a ticking timebomb, and we need to defuse it.

“The government is rightly focused on growth, and getting people to save might not be their top priority in the short-term, but the government also wants to help people to do right by themselves. No one wants to see a generation retire into poverty.”

O’Dwyer called for a “grownup conversation” about how to raise levels of saving into pensions over the next decade, urging the government to build on the success of people’s automatic enrolment into workplace pension schemes, which was introduced from 2012, by creating a long-term plan.

He is one of a number of industry figures who have called for a long-term, cross-party approach to pensions.

His comments came as Royal London’s operating profit before tax climbed by 13% to £144m in the six months to 30 June. It said it had signed up more than 113,000 new workplace pension customers and 510 new workplace pension scheme employers. Its main governed range of pension products attracted net inflows of £1.5bn, with assets under management reaching £66bn.

In March, Larry Fink, the chief executive of BlackRock, the world’s largest asset manager, devoted his annual letter to shareholders to a lengthy warning of a future “retirement crisis” globally, as pension savings fail to keep up with life-extending medical breakthroughs such as obesity treatments.