The government should create a single pensions regulator to help to clamp down on fraud and mis-selling in the wake of George Osborne’s sweeping changes to the retirement market, MPs have said.
In a wide-reaching report, published today, the work and pensions select committee also calls for the creation of an independent commission to protect the interests of pension savers once the reforms come into effect on April 6
Dame Anne Begg, who chairs the committee, said that the flexibility being offered by the chancellor’s changes had the potential to make retirement saving “really attractive”. However, with the pensions industry suffering from a patchy record in advising savers properly on their best retirement options, more needs to be done to prevent people being sucked in by scams or making mistakes in a decision that cannot be reversed.
“What savers really need is a strong single regulator to act in their interests. We believe that the big shift to the new pension flexibilities in April means that it is now time to make this change, which we originally recommended back in 2013.”
At the moment, the policing of pensions is split between the Financial Conduct Authority and The Pensions Regulator. Both said yesterday that they had taken big steps to safeguard savers, who in future will be able to take their pension pots as cash, invest some or buy an annuity giving them an annual income for life.
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The committtee’s call won the support of pensions experts, including Tom McPhail, head of pensions research at Hargreaves Lansdown, the investment manager.
“The select committee is right to call for a single regulator, as it is currently too easy for risks and responsibilities to slip between the regulatory cracks,” Mr McPhail said. “Our preferred option would be for responsibility for all aspects of pension regulation to be given to the FCA. This would mean transferring employees and processes from the Pensions Regulator in Brighton to the FCA in London.” Mr McPhail said that he backed the creation of an independent commission.