BLAENAU Gwent MP Nick Smith has called on the new Tory administration to clamp down on pension mis-selling, saying that attempts to create pension freedoms have started to “sour”.
Mr Smith welcomed news that the Financial Conduct Authority (FCA) has begun a consultation on plans which include banning financial advisers from taking commission when people move money out of pension schemes, but added that this still doesn’t go far enough.
Mr Smith has been a long-time campaigner for stronger action against rogue advisers who give bad advice and mis-sell pensions.
Last December, Mr Smith put it to Prime Minister Theresa May that the FCA “does not have the teeth to sort this out” and has since pushed for police action against those who took advantage of the restructuring of the British Steel Pension Scheme to prey upon steel pensioners in South Wales.
Mr Smith said: “I have been speaking about this crisis for more than 18 months, and only now is the FCA beginning to move in earnest.
“Urgent action is needed from the Government and the regulators to deal with this. People are continuing to receive bad advice and move their hard-earned money when it is not in their best interest to do so.
“I still believe that some of these cases go beyond unscrupulous behaviour and actually amount to complicated cases of fraud.”
During a speech in Parliament last week Mr Smith referring to the British Steel pension crisis as “a serious example of what can go wrong” and warned that “many of the underlying causes are still there.”
Mr Smith also cited an investigation by The Times which found that £60bn has been moved out of defined-benefit pensions in recent years.
The same investigation found that a third of all transfers now exhibit “red flags”.
Mr Smith said: “Already, pensions mis-selling is costing savers £4bn a year.“Those are concerning figures; behind them are pensioners and families who have worked hard only to find that their pensions and pension pots have been put at risk by rogues.”
Mr Smith then urged the new Tory administration to do three important things in tackling this issue.
He said: “They should get the regulators to improve their performance, legislate for tougher action against mis-sellers and protect hard-working people’s life savings from the scammers and the swindlers.
“The Conservative-led coalition Government’s attempt at pensions liberalisation a few years ago is starting to sour.
“This new Conservative Government must sort it out quickly.”