You are here: Home - Retirement - Retirement planning - News -

MPs launch inquiry into pension freedoms

Written by: Paloma Kubiak
An influential group of MPs have launched a probe into pension freedoms following concerns over scams.

The Work and Pensions Committee has launched the inquiry to see how far the pension freedoms are achieving their objectives and whether policy changes are required.

It comes as police data revealed £43m in pension savings have been lost to scammers since the freedoms were introduced in April 2015.

The Pension Regulator recently warned that its anti-scammer ‘kitemark’ has been used fraudulently by scammers and the committee wants to hear people’s experiences to work out how to prevent losses.

Further, the committee said only 7% of pensioners drawing down savings used the free Pension Wise service to help them with the decision. This suggests that people are making their pension choices without the support available, increasing the risk they will not get the best value from their savings.

Nest, the state-backed workplace pension scheme, has expressed concerns that millions of members may be at risk of running out of money, be hit by high charges or pay additional tax as a result of not seeking the right help.

Rt Hon Frank Field MP, chair of the committee, said: “Pension freedom and choice liberated savers to choose what they wanted to do with their own money. This was welcome, but as with any radical reform it’s important to monitor its practical effects closely to ensure it is working as envisaged. In this case it is vital that adequate support ensures people are equipped to ensure they don’t make decisions they subsequently regret.

“I am particularly concerned that savers are more vulnerable than ever to unscrupulous scam artists. This policy must not become the freedom to liberate people of their savings.”

Steve Webb, director of policy at Royal London, said: “The pension freedoms have been overwhelmingly positive, with many thousands of people enjoying the opportunity to use their pension savings in a way that works for them.

“But the select committee is right to look into ways that the operation of the freedoms could be improved. Not enough people are taking advice or guidance about one of the most important financial decisions they will ever make, and there is indeed a risk of people being persuaded to hand their money over to scammers

“Consumers need to be supported to shop around for the best home for their retirement savings rather than just staying with the company they have been saving with so far. The opportunity to get things right under pension freedoms is considerable, but savers need more help and advice to make sure that they can take full advantage of those freedoms”.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Insurance Experts: Are you fully insured? Click here to get a quote.

For a free quote or to speak with an insurance expert call 0800 1218744

Why you may want to rethink pension pot consolidation

Bringing all your pension pots in one place provides holders with fewer charges and ease of management. But he...

HSBC relaxes criteria for its premier account

HSBC has announced changes to its premier account, including a reduction in the annual income required for app...

Finally, some savings accounts beat inflation

The UK rate of inflation came in at 2.5% for March, which means finally, a number of longer-term fixed rate sa...

Ryanair jetting towards US flights for £10

Ryanair is on course to achieve its long-held ambition of offering transatlantic flights to the US – and the...

Investing in car parks: a good vehicle for income seekers?

As the search for income continues, many investors are turning to alternatives, with car parks becoming increa...

Tesco expected to post significant write-offs

Tesco is predicted to unveil the biggest loss in its 100-year history, according to analysts.

Results round-up: Companies to watch this week

Mulberry and more will face the music this week.

Product launches of the week

Select Property Group, Schroders, Leeds Building Society and more have exciting news this week.

Investing your money

Alliance Trust Plc gives you smart insight into how to invest your money

Money Tips of the Week

Read previous post:
Buttoned-up Brits don’t talk about inheritance tax

Brits remain buttoned-up when it comes to talking about inheritance tax matters, with almost half saying they have never discussed...