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MPs call for greater protection for savers following pension reforms

MPs have warned that individuals are at risk of being cheated out of their pension savings by fraudsters unless the Government takes action to address the growing number of scams.

The Commons Work and Pensions Committee published a report stating that the recent pension reforms ‘have increased the prospect of people being conned out of their life savings’.

The committee also foresees the issue becoming the next ‘mis-selling scandal’.

The report suggests that pensions savers who have access to retirement funds have been ‘endangered’ by an absence of protection against high fees and ‘rip-off prices’.

A lack of appropriate advice for those people approaching retirement is also considered a danger, with the new Government-backed Pension Wise service coming under fire from MPs.

Frank Field, chairman of the committee, reported: ‘These reforms have been in operation for six months now: it is evident that that has been long enough for the scammers to get going, working on defrauding people out of their life savings.’

He also added: ‘We have seen all too clearly, too many times, what happens when financial information is not properly provided and regulated. We literally cannot afford another financial mis-selling scandal.’

The new pension rules, which were introduced in April, give people aged 55 and over greater flexibility over how and when they take their pension savings.