DAVID Cameron promised people "security" and "personal responsibility" in their retirement as the UK Government unveiled its latest pension reforms.

People aged over 55 will be able to dip into their pension pot like a bank account as part of the drive to give greater freedom over retirement savings.

And the basic state pension is set to rise by around £150 next year as a result of the 2.5 per cent increase guaranteed under the Government's "triple lock" promise.

Speaking at Age UK's headquarters in London, Mr Cameron said: "What pensioners want is security but also personal responsibility in their old age.

"We are giving security through the extra £150 on the basic state pension next year but we are also giving personal responsibility by saying that people don't have to buy an annuity, that they can take not just one lump sum but a series of lump sums from their pension pots. The view I take is this is their money, they worked hard, they saved, they did the right thing, they should be allowed to take responsibility, with all the advice and guidance that we will make sure they get."

At present, people aged over 55 who want to cash in their pot can take 25 per cent of their pension savings as one tax-free lump sum, but under the Government's plans they will be able to take a series of slices from their pension fund, with 25 per cent of each payment being tax-free.

The reforms come into force next spring and some pension experts fear a "retirement income car crash" as pensioners rush to spend their cash. But Ben Southwood, head of policy at the Adam Smith Institute, said: "Why would people have saved up over such a long time only to blow it all? If we trust people to spend their salary we should trust them to spend their savings."