Employees will be able to contribute to Dutch-style collective defined contribution schemes under plans to be announced in the Queen’s Speech on Wednesday.
Pensions minister Steve Webb has previously signalled his support for CDC schemes, where members’ contributions are pooled and the pension is paid from the collective fund.
The Sunday Telegraph reports the changes could be introduced as early as 2016.
Webb told the newspaper the key advantage of CDC schemes was “pooling the risk” of investments performing worse than expected across large numbers of people.
He said: “People say, you will get a 30 per cent 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.”
But critics argue CDC schemes fail to guarantee a minimum level of income, and only promise a “targeted” retirement income.
Dutch political parties have recently called for collective pensions to be scrapped in favour of British-style individual pensions.