The Financial Ombudsman received 954 complaints, as against 115 in 2006-06.

About eight million people are thought to have left the S2P or its predecessor Serps at some time since opt-outs were first offered in 1988.

Earlier this week, the Financial Services Authority (FSA) said 120,000 people might have been mis-sold the national insurance number
private pensions.

However, it liberty national life insurance company
that the issue was not clear cut and that people who might, in theory, have been too old to benefit from contracting out might still have had some valid reasons for doing so.

“There has been a big increase,” said a spokesperson for the financial midland national insurance
.

“The main message we have is, if a consumer has got a complaint, get in touch directly with us.”

Bad idea

The idea of encouraging people to leave Serps and then the S2P was first put forward by the National council on compensation insurance government in the 1980s as a way of encouraging private pension saving.

In exchange for giving up the right to the second state pension, people are given a rebate on their national insurance contributions, which are then paid into an alternative private pension.

However, in recent years, it has been widely accepted that the policy has been a bad one.

Two years ago, the FSA concluded that most people would have been better off staying in Serps or the S2P rather than contracting out.

And some big insurance firms, such as Norwich Union and the Prudential, have advised hundreds of thousands of their customers to opt back in.