Pensions cold-calling must be banned next year to prevent people being “avoidably conned out of their life savings”, MPs have warned.
The Commons Work and Pensions Select Committee said the scale of the scamming was likely to be grossly underestimated by official reports.
The problem of people being pushed towards “completely legal but totally inappropriate” investments which fall short of fraud needed to be tackled, it added.
Members of the committee said the combination of high financial value and low saver engagement had made pensions a scammer’s “perfect storm”.
They had heard examples of investments such as diamonds, overseas property developments, forestry and film.
The committee welcomed a commitment by the Government to ban pensions cold-calling, but said the draft legislation was flawed because it tied outlawing of calls to the creation of a new financial guidance body – meaning it might not happen until 2020.
The cross-party panel of MPs said a change to the bill would see an enforceable ban introduced by June 2018.
Image: MP Frank Field warns pensions are ‘rich pickings’ for scammers
It has called on the Government to take “urgent action” through the Financial Guidance and Claims Bill, recently unveiled by ministers, “to legislate to protect pensions now”.
Chairman Frank Field said that with “every day that passes without a ban” pensions were “rich pickings” for scammers offering over-the-top returns or seemingly clever advice.
“There is no need to over-complicate this: our proposal would see an enforceable ban in place by summer, closing at least one door on rafts of scammers at a stroke.”
He added: “Making guidance the default option combined with the ban on cold-calling would be a simple but big step forward in consumer protection in the era of pension freedoms.”
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A Treasury spokeswoman said: “We take the threat of pension scams very seriously and we’re already protecting savers.
“We’re bringing forward legislation to ban pensions cold-calling, tightening HMRC rules to stop pensions scammers and fraudulent schemes, and preventing the transfer of money from occupational pension schemes into fraudulent ones.”