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THE TUC and MPs have called for government action to protect people’s life savings when new rules on pensions take effect in April.
Under the new rules over-55s with personal pensions will be able to cash them in as a lump sum rather than be tied to an annual income.
But MPs and the TUC fear that without proper regulation, predatory financial investment firms could rip off pensioners by getting them to invest in inappropriate or unsafe schemes.
The Commons work and pensions committee said relaxing the rules on pensions meant it was more important than ever that proper protections should be introduced.
It was scathing about the pensions industry, saying it had a “poor record” when it came to acting in the best interests of savers and needed to rebuild the trust with the public.
Committee chair Dame Anne Begg said: “Savers need to be properly protected from being ripped off in frauds or scams, or suffering financial loss from making the wrong decision about how to use their pension pots.”
TUC general secretary Frances O’Grady said: “The committee is right to warn that savers are at risk of being ripped off in a new pensions scandal after George Osborne rushed through radical reforms with little thought of the consequences.
“With new pension freedoms starting in less than a month we cannot afford to let savers get stung by excessive charges. The government must seriously consider the proposal from (consumer magazine) Which? for the urgent introduction of a drawdown charge cap.”
