Last month, it was revealed that at least a hundred thousand people had received miscalculated pension payments, and were due compensation; however, compensation for the erroneous calculations falls short of the amount savers are actually owed in up to a third of cases.

Webb has called for the introduction of new rules to obligate financial institutions to compensate customers fully who lose money, and criticised pension providers for “arbitrarily” denying full refunds to customers.

According to the Financial Ombudsman Service (FOS), companies found to have underpaid savers should issue compensation covering the missing money plus interest of 8 per cent for each year the customer was out of pocket. However, several major insurance companies currently calculate refunds using a lower interest rate, of less than 1 per cent.

“If the Financial Conduct Authority wants to protect consumer interests,” concluded Webb, “they should make rules to end the erratic nature of the way people are being compensated.”

“Our approach to compensation is long-standing and very clear cut: if businesses aren’t paying 8 per cent interest on compensation in these circumstances, we ask the firm to pay the customer 8 per cent and in over 95 per cent of cases they agree,” said Martyn James of the FOS.

“But where firms have found errors auditing their own books, there is nothing customers could have done. We would encourage people who have received less than 8 per cent to bring their complaint to us. We are able to resolve the case very quickly and if firms persistently fail to do what we ask we will report them to the FCA.”