Following a report detailing the disastrous impact of Tory ‘pension freedom’ reforms, Patricia Gibson MP has repeated calls for the UK Government to provide dignity for people in retirement by setting up an independent pensions commission.
‘Pension freedom’ reforms were introduced in April 2015 to allow people to draw down their pension pots early, potentially resulting in financial hardship in the future. The Scottish National Party (SNP) voiced their opposition at the time, highlighting that it could result in people transferring out of their pension to their detriment.
In November 2015, Ian Blackford MP, then SNP Pensions spokesperson said he was “increasingly concerned that the UK Government has not yet put in place safeguards for older people opting to free up pension assets.” The House of Commons Library report has revealed that people are now experiencing some of the concerns voiced in 2015.
The report finds that many people were given unsuitable financial advice which encouraged them to transfer their valuable Defined Benefit pensions into less suitable or secure Defined Contribution schemes, leading to growing compensation payments from the Financial Ombudsman Service and the Financial Services Compensation Scheme - FSCS. This may represent a large mis-selling scandal, the full scale of which may only come to light in the event of an economic downturn, fast approaching due to the impact of the coronavirus crisis.
“It is a disgrace that concerns over pensions were completely disregarded by the Tories back in 2015. We asked them to set up an Independent Pensions Commission and introduce safeguards for older people to protect people’s pensions. Problems now arising could have been avoided.
“I urge the UK Government to act now and prevent even more people from losing some or all of their pension. Now more than ever – as we face an economic crisis of enormous scale – the Tories must ensure that people can live with dignity in retirement by protecting their life savings.”
House of Common Library Report: