Ministers are to ban cold calls, text messages and emails related to pensions after losses to scams reached record highs.
The UK government will also tighten rules on pension transfers and on opening new schemes in an attempt to protect savers from fraud, which has escalated since the over-55s were handed more control over their pension savings in 2015.
Scammers have obtained an estimated £43m of pension savings in the past three years, according to official data released on Sunday, with £5m of that stolen in the first five months of 2017.
Fraudsters took an average of £15,000 from each person, while the government emphasised that pension savings are often an individual’s largest asset as they approach retirement.
“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,” said Guy Opperman, pensions minister.
“That is why we are introducing tough new measures for those who scam.”
The cold-calling ban will be enforced by the Information Commissioner’s Office, which can levy fines of up to £500,000. But consumer campaigners warned that the watchdog would need to take a tough approach.
“As fraudsters look for new ways to target even the savviest people, the regulator will need to make sure that these new protections are enforced to safeguard people’s money,” said Gareth Shaw of Which?
Nathan Long, senior pension analyst at the investment group Hargreaves Lansdown, said the move would act as a warning to savers. “Clamping down on calls, texts and emails won’t stop the scammers, but it sends a loud and clear message to be on your guard if you are contacted out of the blue,” he said.
Exceptions will be made where a company already has a relationship with an individual or where the saver has requested information.
Following a consultation, legislation will also restrict registration of new pension schemes to “active companies” that produce regular accounts. Meanwhile, if savers seek to transfer money out of an occupational pension scheme, trustees of that scheme must check the recipient scheme fulfils criteria such as being registered with the Financial Conduct Authority, the City watchdog.
The government did not set a timetable for the introduction of the cold call ban, sparking fears that it was not considered a priority.
“The worry is that with the current busy legislative programme, that it could be 2019 before the ban is included in the Queen’s Speech,” said Sir Steve Webb, former pensions minister and now director of policy with Royal London, the mutual insurer.
“There is an opportunity for the ban to be added to a bill currently progressing through parliament, but if this opportunity is missed then I fear it could be a long time before the ban comes into effect. This is important enough to be done now.”
In 2014 the then chancellor, George Osborne, announced that from the following year, those aged 55 and over would be able to cash in their entire pension pot, with no requirement to buy an annuity, which delivers a secure income.
“People who have worked hard and saved hard all their lives, and done the right thing, should be trusted with their own finances,” he said at the time.
But experts warned that this left consumers vulnerable to poor investment decisions and to crime.
Victims of pension liberation fraud are typically conned into placing their pension funds in investments that do not exist, are illiquid or incapable of delivering the promised returns. Fraudsters may also target under-55s without warning them of heavy tax penalties for “liberating” their pension savings before that age.