Life and pensions group Standard Life said the launch of a landmark scheme to automatically place workers in company pensions hit sales as firms put off decisions ahead of the changes.
The Edinburgh-based business reported a 38% plunge in UK company pension sales to £635 million in the three months to September 30.
It said employers were delaying changes to their pension plans due to the phased launch of auto-enrolment, which began on October 1 and will see up to 10 million people placed in workplace pensions - starting with the largest firms and gradually applying to other firms over the next six years.
But Standard Life said it expects the scheme to boost business in the long run, forecasting a potential 400,000 extra savers.
The group added it was also seeing a surge of new business enquiries as the auto-enrolment scheme prompts firms to review their pension plans, which it hopes will lead to higher sales from next year.
Its overall UK life and pension sales fell 7% in the third quarter to £3 billion as it was also knocked by hefty falls in individual pension business and saving bonds, down 7% and 23% respectively, with "difficult economic conditions" continuing to impact investor confidence.
Sales of DIY-style self-invested personal pensions also fell heavily in the quarter, down 22% amid economic uncertainty and as Standard Life said it lost some sales to providers that still pay commission to advisers.
Changes coming into effect in January - under the so-called Retail Distribution Review (RDR) - will ban commission payments from product providers across the industry, but Standard Life stopped these fees in 2004.
Kevin Ryan, analyst at Investec Securities, said Standard Life suffered a bigger-than-expected fall in UK new business, adding it was unclear if it was "a third quarter blip or something more serious".
But he said there were "plenty of reasons for remaining positive", with Standard Life one of the most RDR-prepared businesses in the industry.