MPs demand default pension guidance in urgent scam action

Other estimates put the figure closer to £20bn.

The MPs said pension scams were nothing new, but the risks had become more pronounced following the pension freedoms reforms.

Scammers were found to be luring people to take money out of their pension pots and invest it in high risk investments, sometimes held in self-invested personal pensions (Sipp).

The committee heard of examples of investments in “diamonds, overseas property developments, store pods, forestry and film”.

Though unlikely to stop all pension scams, a ban on cold calling is a preventative measure which would send a strong message to individuals not to respond to unsolicited contact about their pensions, the pensions committee said.

Yvonne Braun, director of policy at the Association of British Insurers (ABI), said: "With mortgages already protected by a cold-calling ban it is high time pensions were given the same level of protection."

However she warned further measures to prevent fraudsters switching to spam emails and texts will also be important.

Darren Cooke, IFA at Red Circle Financial Planning, had launched a petition for a cold-calling ban on pension and investment products in September 2016.

He said: “Clearly I am very happy. The government has been dragging its heels somewhat over what is a fairly straight forward piece of legislation and a fairly quick one to put through as nobody will object to it.

“In my view the sooner it goes through the better.”