Mr Smith said the government was actively looking into the issue of paying compensation to those affected, but stressed that no guarantees could be made.

As many as 60,000 people are believed to have potentially lost half or all their pensions, despite saving for decades.

Speaking on Channel 4’s 30 Minutes programme, Mr Smith said: “I have to be careful about raising false expectations over what might turn out not to be possible to deliver.”

Tory shadow pensions secretary David Willets attacked the government’s pensions policy and said Mr Smith’s statement was an admission that Labour had let down pensioners.

“Sixty-thousand people have lost out catastrophically as their pension schemes are being wound up. We are committed to helping them… the time has come for the government to act,” he said.

There is mounting pressure on the government to offer compensation to workers who have lost their pensions. Former social security minister Frank Field says there is cross-party backing for an amendment to the Pensions Bill which would help workers whose savings were hit because of business failures.

The Bill would create a fund to guarantee occupational pension payouts when firms go bust, but will do little to help those who have already lost out.