The former staff of recently-folded firms stopped traffic for half an hour at the busy Oxford Circus junction. Many of them lost their pensions when their companies went bust and the protesters claim ministers failed to protect their pension funds.

Sixty-year-old Peter Humphrey from Hemel Hempstead worked for storage firm Dexion until it went into receivership in May 2003.

He said: “Most of us have paid into pensions for up to 40 years and now we have nothing. I should have started receiving my pension in August. Now I’m told I won’t get anything until I’m 65.

“Legislation needs to be changed. There is no cover for company wind-ups.”

Under current law workers are at risk of losing their workplace pensions if their firm collapses, however long they have paid contributions for.

The government plans to introduce a law under which employers must pay into a protection fund to cover workers if they go bust. The new plans will only apply from 2005, and workers who have already lost out won’t be compensated.

Today’s protest came as a House of Lords committee called for a fairer and simpler system of state pensions based on years of residency, and not National Insurance payments.

Workers would be expected to save any extra money they required for their retirement on top of that.