Ministers prepare radical pension reforms

As pension reforms are set to be unveiled in the Queen's Speech this week, other legislation expected to be addressed includes:

• A crackdown on highly paid civil servants and NHS executives receiving large redundancy pay-offs before taking similar jobs within a year.
• Tax free childcare for families where both parents work, worth up to up to £2,000 per child.

• An infrastructure and competitiveness Bill will change trespass laws to allow shale gas exploration firms to drill beneath private property without needing the owners' permission.

• A "Recall Bill" allowing voters to sack their elected MPs if they are not up to the job is expected to be included, although it has been subject to disagreements inside the coalition.

Read: Pension reforms to be addressed in Queen's Speech

Pensions minister Steve Webb has described collective pension schemes as "some of the best in the world", as radical reforms are expected to be addressed in the Queen's Speech this week.

He told The Sunday Telegraph that the key advantage was "pooling risk" of investments performing less well than expected across large numbers of people of different ages, "just like car insurance or the NHS".

"It gives people greater certainty and probably better value," he said. "There are some quite strong claims made for how much better it is. People say, you will get a 30% bigger pension.

"You might, you might not, but clearly it is pretty unambiguous that you will get a more certain outcome and potentially a better one."

A radical shake-up of workplace pensions is set to be unveiled in the Queen's Speech this week, with supporters saying retirement incomes could be boosted by thousands of pounds.

For the first time, staff will be able to put their money into Dutch-style "collective pensions", shared with thousands of other members.

The so-called "mega funds" are regarded by many as a better investment because they are less vulnerable to variations in the stock market. The controversial changes, which could be introduced as early as 2016, are intended to deliver better value for pensioners.