Businesses that seek to use new pension freedoms to exploit people will be dealt with “seriously”, David Gauke, financial secretary to the Treasury, has warned.
Speaking in the House of Commons during the second reading of the Taxation of Pensions Bill, Mr Gauke said the government would come down hard on so-called liberation firms.
Addressing concerns from Dame Anne Begg, the chairman of the work and pensions select committee, Mr Gauke said: “The guidance guarantee will ensure that guidance is available to people on what their options might be, to point them in the right direction.
“Secondly, we recognise that the regulators have an important role to play. The FCA is very engaged in this matter, setting standards and ensuring proper enforcement.
“Dame Anne is right that we must deal seriously with any unscrupulous businesses out there that seek to exploit people, but we have a regulatory regime in place to address that very point.”
He added that government guidance on the new freedoms would not recommend any specific products.
Andrew Warwick-Thompson, The Pensions Regulator’s executive director responsible for the regulator’s work to frustrate pension scams, said: “We will continue to liaise with government and other agencies to seek to ensure individuals receive the information they need to protect themselves from scams.”
The Taxation of Pensions Bill incorporates changes announced by the chancellor in this year’s Budget. From April, people aged 55 and over will be able to get their defined contribution pension savings when and how they choose.
The Public Bill Committee has requested that interested parties send in written evidence by 20 November. Email your submissions to email@example.com.
Philip Stevenson, director of Cheshire-based Ark Independent Financial Advisers, said: “I do not see an increased risk of people being conned out of their savings, I see an increased risk of members of the public getting it wrong, and an even greater need for advice than there is now.
“I would be happier if the powers-that-be did a bit more to focus on firms that profess to unlock people’s pensions, and tell them they can have their pensions before 55, which is just a scam.”