Holiday companies and insurance firms will be able to avoid a ban on age discrimination, the Government has announced.

There had been fears the Equality Bill would prevent tour operators such as Saga or Club 18-30 organising holidays for specific age groups.

But junior equalities minister Michael Foster said a series of exceptions would be made to the Bill for "specialist group holidays", financial service providers and insurers.

In a statement to Parliament Mr Foster said: "We want the legislation to have the same effects in health and social care as in other sectors, that is: To eradicate harmful discrimination and to permit service providers to treat people of different ages differently where this is beneficial or justifiable or for good public policy reasons."

The Bill will also "ensure that when services deal with individuals, they focus on the individual, taking account of his or her age where it is appropriate to do so and where this helps to offer a personalised service".

The exemptions will be set out in an order, which the Government will consult on in the autumn.

Mr Foster said: "We will create a specific exception to allow financial service providers to treat people of different ages differently, but only where this is proportionate to risks and costs.

"Prices can still be varied by age, where this genuinely reflects risk or costs and is not an arbitrary decision."

Saga spokesman Paul Green welcomed the announcement, which he said was a "victory for common sense". He said that by specialising in offering holidays and financial services to the over-50s Saga was able to provide a better deal for them.

He said: "We have certainly been campaigning very hard both in the Commons and the Lords about this. I think it is a victory for common sense. We will have to look at the detail of it but the key thing is that the Government listened to us."