Summer Adjournment

Part of the debate – in the House of Commons at 2:29 pm on 25th July 2019.

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Photo of Nick Smith Nick Smith Opposition Whip (Commons) 2:29 pm, 25th July 2019

I will focus on the rise in pensions mis-selling and say why this growing problem needs an urgent response.

Just this week, an investigation by The Times found that £60 billion had been moved out of defined-benefit pensions in recent years. That is much higher than was previously thought. The Financial Conduct Authority says that most savers would be better off staying in defined-benefit schemes, but The Times says that a third of all transfers now exhibit red flags. Already, pensions mis-selling is costing savers £4 billion 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.

South Wales was at the centre of a mis-selling crisis with the British Steel pension scheme two years ago. Steelworkers were aggressively targeted by unscrupulous advisers when deciding what to do about their pension options. At least several hundred of them received unsuitable advice, while the response of key regulators was halting and insufficient. I hope that the authorities and the police will take firmer action in future. This was a serious example of what can go wrong, but many of the underlying causes are still there.

The new Administration urgently needs to do three things. 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.