Pension firms will not be allowed to advise people on their retirement options from next April, but they will effectively be forced to pay for independent advice for retirees.
The Chancellor, George Osborne, has filled in much of the detail around the new pension freedoms he announced in his March Budget, which was largely welcomed by consumer groups but left much of the pensions industry still warning of potential problems.
Crucially, Mr Osborne said the guaranteed guidance on pension choices offered as part of the new rules must be provided by independent organisations rather than pension schemes or providers.
The advice will be free to the consumer but will be paid for by a levy on regulated financial services firms.
The Chancellor pointed out that Treasury research showed that "consumers would not trust guidance given by a person or organisation with a vested interest in selling a financial product or service". He said: "We're making sure that people have the right support to make their own choice about how best to finance their retirement.
"Everyone with defined contribution pension savings reaching pension age will get free and impartial guidance."
The changes follow years of concerns that annuities may have been mis-sold as pension providers were allowed to effectively put people into their own products, irrespective of whether they were the best or most cost-effective option.
Mr Osborne's statement draws a line under that practice and he said that 18 million people would be able to benefit from the changes, which come into force next April, when pension pots can be withdrawn for the first time without buying an annuity.
In future pensions guidance will be offered through channels, including web-based, phone-based as well as face-to-face.