Pension fraud crackdown: Scammers face 7 YEARS in jail and £1m fines

Pension fraud crackdown: Scammers face 7 YEARS in prison and £1m fines

“Jail for pension pot pinchers will, I hope, deter reckless bosses from working schemes into the bottom,” she stated.

Different measures within the laws embody a brand new “pink flag” alert system to advise savers when to take recommendation earlier than transferring pension financial savings into various funds.

New digital pension “dashboards” making details about retirement financial savings obtainable to savers by way of their smartphone, pill or laptop screens are additionally deliberate as a part of the Invoice.

Ms Coffey informed MPsa: “Pensions are a elementary a part of everybody’s future. 

“They provide safety later in life and may present much-needed funding to assist to construct the sustainable future we’d like. 

“This Invoice delivers on our manifesto commitments to legislate for a brand new model of pension scheme, set up pensions dashboards and deal with those that attempt to plunder the pension pots of hard-working staff. 

“It creates a brand new model of pension scheme that has the potential to extend future returns for hundreds of thousands of working folks whereas being extra sustainable for workers and employers alike.”

She added: “The Invoice introduces felony sentences, in order that the worst offenders might find yourself in jail for seven years, guaranteeing that those that play quick and unfastened with hard-working folks’s pensions face justice. 

“These necessary measures introduce the facility to challenge civil penalties of as much as £1 million, in addition to creating three new felony offences for people discovered to be appearing wilfully or recklessly.”

Ms Coffey stated the Invoice aimed to “present a enough deterrent to make people assume twice” earlier than placing pension fund members’ financial savings in danger.

Labour’s shadow work and pensions secretary Jonathan Reynolds stated the Invoice would make “stable steps” in the direction of permitting savers to be extra answerable for their belongings however wanted to go additional.

Stephen Timms, one other Labour MP, additionally referred to as for the way the Invoice to go additional to suppress the rising variety of “devastating” pension scams.

He informed MPs: “The proposal that I need to desk is that trustees ought to have the ability to refuse to make the switch altogether if one of many main pink flags is raised.

“And my view, and I believe others I do know shall be supporting this modification as nicely, is that the statutory proper to switch conveyed within the pensions freedom laws shouldn’t apply in such a case.

“We’ve heard this morning from scheme trustees not solely that they’ve an obligation to switch even when they know completely nicely that the vacation spot is a rip-off, but additionally, in the event that they don’t do it rapidly sufficient, they are going to be fined for not getting a transfer on below the present preparations that are in place.

“And I believe it is vitally laborious to argue that the statutory proper of switch ought to apply, for instance, in a case the place the vacation spot is a agency which is definitely listed on the Monetary Conduct Authority warning record.

“If the trustees of a scheme know {that a} specific switch goes to a agency which is on that record they need to certainly not have a authorized obligation, as they do in the mean time, and can nonetheless have below the Invoice, handy the cash over to crooks if the saver has taken recommendation, however nonetheless, regardless of that recommendation, needs to go forward.”

SNP work and pensions spokesman Neil Grey stated his celebration wished to see “a lot larger velocity utilized” to the rolling-out of auto enrolment to folks on decrease incomes and youthful folks.

Mr Grey stated: “We’ve referred to as for the UK Authorities to decrease the age threshold for auto enrolment to 18, in order that younger folks can profit from saving early for retirement.

“Take away the decrease restrict for the qualifying earnings band in order that contributions are payable from the primary penny, first pound earned and broaden contribution charges past the 8% statutory minimal.”

MPs agreed with no vote for the Invoice to proceed its progress by means of Parliament following the formal “second studying” debate.

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