Government announces measures to protect pension pots

The government has announced new measures that should mean the average Briton has more money to live on when they reach retirement.

Minister for pensions Steve Webb has published a plan to try and get millions more people saving for old age by making sure that pension pots are protected when they move jobs.

He explained that Short Service Refunds for direct contribution occupational schemes will be abolished, which will prevent workers from getting their pension contributions back when they change one career for another and spending them.

Mr Webb also said action will be taken to protect small pension pots.

"I do not want to see people who are doing the right thing by saving, ending up with very little for their retirement because the system is too complicated. I want to make it as easy as possible for people to grow big fat pension pots," he added.

It is thought there will be 4.7 million more small pensions in the UK by 2050, with the average person changing jobs 11 times.

Insurer Aviva said it supports both of these moves.

Spokesperson Paul Goodwin added: "We'll be working with the [Department for Work and Pensions] to support the process to improve employees' options around saving in the workplace."

Meanwhile, Age UK's Michelle Mitchell said she is "delighted" the government is responding to lobbying that has called for simplification of the system for some time.