PENSIONERS are being ripped off by fund managers who make a “fat living” from their hard-earned savings, MPs said today.
Some elderly people could have their entire retirement funds “wiped out” by hidden costs, a new report warns.
The Work and Pensions Committee calls on ministers to take action to protect customers as it says the industry cannot be trusted to do so.
Chairman Frank Field said: “Ripping off pension savers could be eliminated.
“The select committee is calling on the Government to shine the searchlights into that part of the financial industry that has settled down to misinforming, mischarging, overcharging and making a fat living off the hard-earned savings of pensioners.
“Government and regulators should not wait for the industry to fail to act voluntarily as they have so many times in the past. It must put the full force of the law behind such changes.”
The study finds that because of the array of annual fees and charges that pension funds can impose, a pensioner with just a few hundred pounds saved up could see it “completely eroded”.
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It also warns of the risks of “unscrupulous advisers” who are feared to have skimmed £2billion from unsuspecting pensioners’ funds in a year.
Yet the MPs found the Financial Conduct Authority watchdog only employs 10 people to combat pension scams, out of a workforce of 3,700.
Last night the Department for Work and Pensions insisted: “We have taken decisive action to limit charges and make the costs of saving into a pension more transparent.”
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