Today the Work and Pensions Select Committee finally confirmed that it will be investigating pension scams as part of its inquiry into pension freedoms, writes Kat Mitchell.
The Coronavirus pandemic has served to further escalate the scale of the pension scams problem, which the government now seeks to address.
A report from Canada Life said that over 5m people in the UK had fallen victim to a financial scam in April/May 2020 or knew someone who had. Whilst banking scams were the most common, almost one in five non-retirees had been contacted by scammers offering a free pension review (this figure rose from one in ten of those surveyed in August 2019.)
This reactive approach is fairly typical of how the government has approached pension reform in recent years.
Many recent pension reforms have been retrofitted into the system after pension freedoms was introduced in 2015.
The pension cold-calling ban was introduced rather slowly and only following an earlier petition that won widespread financial services industry and public support. By the time it was introduced it was already far too late for many people.
This new inquiry into pension that have emerged as the result of pension freedoms could be seen as another example of government only acting after the problem was already widespread.
This reactive, rather than proactive, is frustrating for many in the industry who feel such things could have been considered from the outset should the government take a more consultative approach. Afterall, handing savers total freedom of choice over how they spend their pension from the age of 55 was always going to make them a prime target for less scrupulous members of society.
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