Thousands of people have been misled by official information over the security of their company pensions and should be compensated by the Government, according to the Ombudsman.

His scathing report said leaflets on final salary (or defined benefit) pensions were “inaccurate, incomplete, inconsistent and potentially misleading”.

But the hopes of 85,000 people that the Government would compensate for pensions lost when companies went bankrupt were dashed by Stephen Timms, the pensions minister.

He said the Government had “great sympathy” with those who had lost their pensions but rejected the finding of maladministration.