As of June last year, small occupational pensions have able to be taken as a lump sum up to the value of £2,000.
The Government has also outlined in the Budget plans to consult on whether couples should be allowed to combine small pension pots to buy joint-life annuities.
The report states: “Budget 2008 announced changes to the tax rules to enable small occupational pension pots to be taken as a lump sum. The same flexibility was not extended to non-occupational pension schemes to minimise avoidance.
“The Government remains open to proposals for further simplification provided they would not increase Exchequer costs or add significant costs for HMRC and would not be open to manipulation.
“The Government is also open to proposals consistent with these principles for couples to pool small pension pots to achieve better value by purchasing a joint-life annuity.”