George Osborne has said changes that allow pensioners to cash in annuities will give them more freedom over their money.
Under new legislation that would come into force in April 2016, pensioners will be able withdraw all or part of their contributions, rather than buy an annuity that pays out for the rest of their life.
The move was first announced in the 2014 budget, but the Chancellor's announcement has been timed to attract the so-called "grey vote" to the Conservatives ahead of the general election.
Appearing on the Andrew Marr Show, Osborne said the changes allowed five million pensioners more access to their money.
He said while some will prefer to have an annuity, "Some will want access to money. It is all part of trusting people who worked hard and saved all their lives for their pensions."
Critics claim the reform could leave pensioners needing assistance in later life if they take out a lump sum and spend it all.
Quizzed by Marr on what would happen if a pensioner squandered the cash, Osborne said that was a "very patronising" view and that he believed in offering them "freedom".