Former pensions ministers Ros Altmann and Steve Webb have urged the Government to make sure pension savers are adequately protected under new plans to reclaim “dormant assets” for charities.
Earlier this month the Government announced plans to widen a scheme to release assets in bank and building society accounts untouched for 15 years and put them to good causes, potentially including pension and insurance assets within the scope of reclaimable assets.
While the Government has said “appropriate” efforts would be made to put pensioners back in touch with their money before it was released, and customers could reclaim their money if they discover it thereafter, Altmann and Webb have called for strong consumer safeguards to be put in place.
Altmann tells the Financial Times she “would be very concerned about the Government using dormant pension assets, since many people lose track of pensions for decades but do come back to find them”.
She says: “The main issue is to ensure that, before any assets are used, proper checks and efforts have been made to contact the owner and allow them to come forward.”
Up to £500m could be available to the scheme, according to estimates, bolstering an original scheme that has been in place since 2011.
Webb suggests that the scheme could pushed back until the pension dashboard becomes live so savers have the best chance of finding lost pots before they are reclaimed.
However, he says he has “no particular issue” with charities benefiting from dormant pension assets “provided that the pension scheme or provider has done everything they reasonably could to reunite people with their lost pensions”.
Labour’s new shadow pensions minister Jack Dromey tells the FT that the Government should conduct a full consultation on the proposals before bringing pensions assets into the scope of the reform.