The government is stepping up its efforts to promote stakeholder pension schemes, which have so far been met with apathy.

The Treasury and Department for Work and Pensions has started a pilot scheme involving 100 firms, with information packs being sent out to workers, providing them with financial advice for their retirement planning.

The latest drive aims to tackle the problems surrounding stakeholder pensions and the lack of uptake in the workplace.

The pensions were originally set up as low-cost, flexible pension plans, the idea being that staff and their employers would save money in them, which would then be invested into the stock market to provide a healthy pension in retirement.

But while employers with five or more staff must legally provide access to them the majority of firms do little to actually promote them.

Sue Millar, of the DWP, says: “Some companies have set up a stakeholder then put a poster up saying this and left it at that. We have broad powers to get employers to do more. We are taking the softer approach now and will see how they respond.”

At present around 350,000 firms merely offer them but pay in derisory amounts and many do not pay in a thing.

These companies, often small and medium sized, are now being targeted by the government.

The secretary of state for pensions, Andrew Smith, added: “While many firms work hard to offer quality pension provision, a substantial number still offer nothing in terms of contribution.”

The government put new powers into the Pensions Bill to force employers to give advice to their staff. These powers will be used if the pilot is not successful.

Draft legislation is expected to make it much easier for employers to advise staff.