Pension transfers should be put on hold for six months, suggests former minister

Ros Altmann called for emergency measures to help stabilise pension schemes and avoid losses to scammers.

She said all pension transfers should be put on hold for a suggested period of six months.

Baroness Altmann said “wild market movements” as coronavirus spreads make it hard to understand what underlying investments are worth – and could lead to current valuations potentially being unreliable.

Baroness Altmann said: “It is not clear where markets may settle, or what long-term interest rates will be in coming weeks or months.”

She continued: “Introducing measures to delay all pension transfers for up to six months would seem a sensible way of helping to stabilise pension schemes and allow time for a clearer picture to emerge.”

Baroness Altmann also said that, with so many people now staying at home and the recent market mayhem, there is a greater risk of cold callers reaching more targets with fake promises of big investment returns.

She said: “If people fall prey to scams, they may not bother to take any guidance or advice.”

She also said that, if pension transfers were put on hold for a set period, efforts to cleanse any errors that may have crept into people’s pensions data could be stepped up.

Baroness Altmann said: “With the enormous complexity of pensions, and much of payroll still being carried out manually for vast numbers of small businesses, even the latest auto-enrolment pension records are full of inaccuracies.

“Using the coming months to focus on data cleansing would have significant advantages.”

She said accurate data will be essential for the new pensions dashboard which is in the pipeline, which will enable people to see all their pension savings online in one place.

Baroness Altmann added: “If pension records are wrong, pensioners will be at risk of reduced pensions in future. Increasing attention given to pension administration now will save more pain later.”