UK pension reform
An investigation has been launched into claims millions of people's pension pot details are being sold (Getty)

An investigation has been launched over claims that details about millions of people's pensions plans could have been sold to criminals and cold-calling firms.

The Information Commissioner's Office (ICO), the privacy watchdog, said it will look into the claims first reported by the Mail on Sunday that pensioner's salaries as well as the size and value of their pensions may have been sold without their consent. The information changed hands for as little as 5p, said the report.

The details may then be passed onto criminal gangs or fraudsters and used to target people at a "critical point in their financial lives".

Undercover reporters for the Mail on Sunday were sold pension pot data for 15,000 people without any checks made against them or why they wanted the details.

Steve Eckersley, the head of enforcement at the ICO, described the reports as "very worrying indeed".

He said: "It suggests a frequent disregard of laws that are in place specifically to protect consumers. We will be launching an investigation immediately.

"We're aware of allegations raised against several companies involved in the cold-calling sector, and will be making inquiries to establish whether there have been any breaches of the Data Protection Act or Privacy and Electronic Communications Regulations.

"The ICO has powers to issue companies with fines of up to £500,000 for the most serious breaches of the Data Protection Act, while we can also pursue criminal prosecutions around unlawfully obtaining or accessing personal data."

The claims arrived just before reforms that would allow Britons to access their full retirement pots. These come into force on 6 April.

The ICO said in some cases people's pension details were being accessed by firms because people failed to fully read the terms and conditions, but some companies did appear to access the details illegally.

But there were instances where details were either stolen, or personal details kept when they should have been deleted.

Discussing the pension reforms, Eckersley added: "The information we've been shown supports the work we've been doing to target the shady industry that operates behind the nuisance of cold calls and spam texts.

"We're already aware of the potential for a huge spike in the number of scam texts and calls linked to pensions when the law changes in April, and have already taken action against a company that was sending out misleading messages.

"What we've seen here confirms those fears. Personal data is such a valuable asset, particularly financial information.

"The worst case scenario here is this information getting into the wrong hands and being used to target individuals at a critical point in their financial lives."

Shadow work and pensions secretary Rachel Reeves said: "[The] revelations that personal data is being passed on to those looking to make a quick buck out of pensioners' savings are shocking.

"This is further evidence of the Government's total failure to protect more than 300,000 savers who could start accessing their pensions in just over a week's time.

"Ministers have ignored warning after warning about the threats to savers from fraudsters, but they must now act quickly to protect savers from these serious threats to people's hard earned retirement income.

"Labour supports greater flexibility on retirement, and will take swift action to protect savers, with a cross-government task force to stamp out scams, and caps on pension fees and charges, including for retirement products, so that savers get the most out of their money."