Pension Reforms Increase Potential for Scams, Warn MPs

The Commons Work and Pensions Committee has published its report on the advice which is available to all retirees benefitting from the new pension freedoms

Emma Wall 19 October, 2015 | 3:30PM

Pension freedoms could become the next big mis-selling scandal MPs have warned – leaving investors facing losses similar to the sums involved with the mis-selling of structured products, or even the multi-billion pound payment protection insurance (PPI) disaster.

The Commons Work and Pensions Committee has published its report on the advice which is available to all retirees benefitting from the new pension freedoms. As of April this year, pension savers have no longer had to buy a compulsory annuity. But before they can access their cash, retired savers are advised to take advantage of free guidance on offer.

The Government tasked the advice industry with providing this free guidance to all retirees known as the ‘guidance guarantee’ following last year’s Budget when pension freedoms were announced. Almost immediately the pensions industry hit back saying the proposals did not allow providers enough time to set up the system and that any advice would be restricted and therefore flawed.

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About Author

Emma Wall  is former Senior International Editor for Morningstar

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