More than 150,000 people are to share £3.5 billion in government compensation as a result of issues with the pension market.
The Department of Work and Pensions has announced that many workers will have at least 90 per cent of their pensions guaranteed after their employers "went bust".
Angela Eagle, minister of state for pensions, said: "The government is completing its promise to provide a just and final settlement for those who lost pension savings when their employers went bust.
"There can be few greater cruelties than to find the pension you have earned has suddenly disappeared through no fault of your own."
Despite the mass payout, concerns about the fragility of the economy could see a number of employees seeking additional ways of funding their retirement as a security measures.
This could lead to an increase in the popularity of equity release schemes which can boost the income of a property owner with funds taken from the value of their home.
