Government plans to allow retired workers to "shop around" for better rates if they are unhappy with their pension providers were slammed yesterday as "window dressing" by activists.

Introducing the measure, Lib Dem Pensions Minister Steve Webb said he wanted to end "murky" practices which have trapped many pensioners in potentially poor-value schemes.

Mr Webb insisted practices needed to be transparent and said he would also address "hidden charges" from insurers.

He told the Sunday Telegraph: "When you take out a mortgage, in a few years if rates change you can switch your mortgage.

"But when you take out an annuity, that's it - for life. This could easily be for a quarter of a century. Why shouldn't you be able to change your annuity provider?"

However the National Pensioners Convention retorted yesterday that the policy is "window dressing" which will not tackle the inherent long-term instability of annuity investments being pushed onto workers through the new auto enrolment scheme.

Spokesman Neil Duncan-Jordan said: "The government is forcing responsibility on to the individual rather than dealing with a societal issue it should be tackling itself.

"The reluctance to intervene is based on their reliance on the industry to cover the state pension. They're doing away with the safety net so they need to rely on providers to produce decent pensions. It's desperation."

Annuity investments convert contribution pension savings into retirement incomes.

New annuity business - which currently sees 400,000 sold each year in a £12 billion market - is expected to double over the next few years due to the impact of maturing pension plans and the introduction of auto-enrolment for private sector workers.

The Financial Services Consumer Panel last month found that while product complexity had increased, professional advice was harder to find, with retirees "losing valuable consumer protection." It called for an urgent reform of the market.