Pension probe could undo damage of British Steel saga

Pension probe could undo damage of British Steel saga

Advisers are being urged to “rise to the challenge” presented by the work and pensions select committee's inquiry into pension costs and transparency, and undo some of the damage done by the British Steel Pensions scandal.

Following the committee's launch of the inquiry, Kay Ingram, director of public policy at national firm LEBC group, said this was an opportunity for IFAs to encourage MPs to pressurise the Department for Work and Pensions (DWP) to introduce the pensions dashboard amid speculation that the government may abandon plans.

The inquiry also presents an opportunity for IFAs to undo some of the damage done by the British Steel Pensions scandal, she commented.

Ms Ingram also said now was a good time to place pressure on HM Treasury to reform pension savings tax.

"There is a need to engage consumers with their pensions. While the committee is right to ask questions about pricing, there are many more aspects to the need for greater consumer education," said Ms Ingram.

"I hope we can encourage the MPs to put pressure on DWP to launch the dashboard, on the Treasury to reform pension savings tax and on the Government to introduce a cooling off period for non advised access to pension freedoms so that no one gets a surprise tax bill or restrictions on future pension saving without being warned about this before they take their money."

The inquiry, which was unveiled on Friday 3 August, will examine whether or not consumers are getting the most out of their pensions and if enough is being done by providers to inform them on how their money is being invested, what they are charged for and the impact of costs on retirement outcomes.

The committee has previously criticised advisers involved in the British Steel Pensions scandal for coercing customers into choosing unsuitable pensions products and signing up to contingent charges when transferring out of their defined benefit (DB) schemes.

The Financial Conduct Authority has since taken on the responsibility of reviewing contingent charges by DB transfer agencies and will report back to the committee in the Autumn.

The market is hoping for more "joined up thinking" and recognition from the committee of the interconnected nature of regulatory reforms being carried out.

Andy Agathangelou, founding chairman at the Transparency Task Force, said: "Given the enormous impact that costs, charges investment strategy and performance have in driving outcomes for pensions savers it is good news that the Work and Pensions Committee has decided to open this inquiry.

 "There is a universal shared interest among policymakers, regulators, ethical product providers, client-centric intermediaries, campaigners and of course consumers that pension savers get the best value for money they can; everybody should be supportive of the move.

"Furthermore, because there has been extensive connected activity in this space from the FCA, DWP, TPR, CMA and other actors I hope that Frank Field’s committee helps to create a comprehensive understanding of how the totality of the regulatory reforms underway interconnect. In short, we need more joined-up thinking and this will help."