People reaching the age of 55 are to be given more flexibility over what they can do with their pension pots as they approach retirement.
Chancellor George Osborne will announce today that the over-55s will be able to withdraw several lump sums instead of just one.
The move is part of an ongoing restructuring of pensions, which the government wants to move away from the traditional annuities-only system.
Some of the changes that will be in the Pension Tax Bill were announced in the Budget, but the Chancellor is now unveiling more proposals.
From April individuals approaching retirement and pensioners will be able to take a series of lump sums, rather than being forced to withdraw all their money in one go.
The changes raise the prospect that pensioners could fund their retirement by using their pension pots almost as bank accounts or by investing in other assets like property or shares.
Until now, people who retired were only able to take 25% of their pension as a tax free lump sum in cash in one go. The rest had to be spent on a product like an annuity.
Now, pensioners will be able to take multiple lump sums, with a quarter of each withdrawal tax free.
The remaining 75% of each withdrawal will be taxed at whatever rate they are required to pay based on their annual income.
The government is also planning to do away with the taxation of any pension contributions that have been unused and a person wants to pass on to their relatives.
Previously any inheritance of unallocated pension funds was taxed at 55%.
Mr Osborne said: "People who have worked hard and saved all their lives should be free to choose what they do with their money, and that freedom is central to our long term economic plan.
"From next year they'll be able to access as much or as little of their defined contribution pension as they want and pass on their hard-earned pensions to their families tax free.
"For some people an annuity will be the right choice whereas others might want to take their whole tax free lump sum and convert the rest to drawdown.
"We've extended the choices even further by offering people the option of taking a number of smaller lump sums, instead of one single big lump sum."
Pensions campaigner Ros Altmann said: "The Government's changes have the potential to help millions of pension savers make better use of their pension funds.
"Being free to access their money freely as they need to, rather than being forced to buy particular products will be very popular."
The Government announced earlier this year that around 320,000 people would get the freedom to access pension pots flexibly without suffering punitive tax rates.
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