Minister: We will press ahead with tough measures to protect pension savers
The government has announced it will press ahead with “tough” measures to protect pension savers as figures reveal almost £5m was lost to scammers between January and May this year.
It confirmed there will be a ban on all cold calling in relation to pensions, including emails and text messages. It also plans to tighten HMRC rules to stop scammers opening fraudulent pension schemes, as well as imposing tougher actions to help prevent the transfer of money from occupational schemes into fraudulent ones.
The crackdown was first announced in autumn 2016 with a consultation ending in February and the government expected to respond by May. However, the snap General Election led to the ban being excluded from the upcoming Financial Guidance and Claims Bill, as announced by the Department for Work and Pensions in July. It then emerged that the government was considering issuing a second consultation on the ban, raising concerns that legislative action would be delayed even further.
As set out in the original proposal, government wants to limit pension pots from one occupational scheme to another, which was announced in the Treasuries autumn statement in 2016, stating it wants to give firms more powers to block suspicious transfers.
There are also plans to tackle scammers by ensuring only active companies which produce regular, up-to-date accounts can register pension schemes.
It comes as figures released today by the City of London Police showed those targeted have lost an average of nearly £15,000 since April 2014 – a year before Freedom and Choice came into force. It is estimated that people have been scammed out of £43m since 2014.
Minister for pensions and financial inclusion, Guy Opperman said:
“Today’s figures highlight the extent to which people’s savings are being targeted and stolen through elaborate hoaxes – leaving them with little opportunity to build up their savings again. That is why we are introducing tough new measures for those who scam.
“If people have saved for a private pension, we want to protect them. This is the biggest lifesaving that individuals normally make over many years of hard work. By tackling these scammers, people should know that cold calling, apart from exceptional circumstances, is banned.”
Economic secretary to the Treasury, Stephen Barclay said: “It’s utterly unacceptable that people who have worked all their lives to build up a pension pot should be subject to scams which may leave them out of pocket.
“Pensions are often the most valuable asset a person has upon reaching retirement – and that’s why we are determined to crack down on scammers and protect our hardworking savers.”
The cold calling ban will be enforced by the Information Commissioner’s Office – the UK’s independent body set up to uphold information rights.
Baroness Ros Altmann, who has been a critic of delays to legislative action, said banning cold calling and tightening up on transfers to fraudulent schemes will both help protect the public.
Royal London director of policy Steve Webb said while he welcomed today’s announcement, “it is vital that this ban is implemented as a matter of urgency.”
“Savers are being ripped off every day, and the official figures greatly understate the amount that is being lost. We cannot afford to wait months or even years before it is illegal to phone someone up out of the blue in this way, as a cold call is often the first step to a scam.”