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MPs to look at independence of DB transfer advice

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MPs to look at independence of DB transfer advice

MPs on the Work and Pensions Select Committee will look into whether people transferring out of defined benefit (DB) pensions are receiving impartial advice.

Advisers have reported an increase in demand for DB transfers since the introduction of former chancellor George Osborne's pension reforms in 2015. This has prompted questions about the suitability of some advice, especially when a company is looking to reduce its pension scheme liabilities. 

Speaking to New Model Adviser®, Work and Pensions Select Committee chairman Frank Field (pictured) said he was concerned that companies were appointing advisers in order to encourage people to transfer out of DB schemes. 

‘I am concerned that companies hire the people who are actually going to give the advice,’ he said.

‘I think this is a treacherous area for people and if they are going to make a move they really need independent expert advice and not salesmen sent along from the company. So this is something we will be looking at.’ 

Last year Field led the committee's investigation into the BHS pension scheme, which eventually grew into a wider probe of DB pensions in the UK.

Field, who was re-elected as chairman of the committee in July, said he now intends to consider pension protection for consumers more widely in light of the 2015 pension freedom reforms. 

‘I am sure if Osborne could take a minute off his total obsession of editing the Evening Standard, he might actually think he should have re-written his proposals giving much more safety checks for people who may get excited by drawing down sums which they have never seen before,’ he said.

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