Government confirms ban on pensions cold calling

Government confirms ban on pensions cold calling

The government has confirmed it will ban pensions cold calling, after a parliamentary petition launched by a financial adviser put the issue into the spotlight two months ago. 

Treasury stated on Saturday (19 November) that a complete ban on pensions cold calling would be included in chancellor Philip Hammond's Autumn Statement on Wednesday (23 November).

The ban will stretch to the cold calling of people who have inadvertently opted in to receiving third party communications. Violation of the ban could attract fines of up to £500,000.

Mr Hammond will also announce two other pension scam-related measures in his Autumn Statement.

The first will give more powers to firms to block suspicious transfers.

The second will stop small self-administered schemes (Ssas) setting up using a dormant company as the sponsoring employer, making it harder for scammers to open fraudulent pension schemes.

Treasury stated the ban on cold calling would "help bring an end to the misery brought about by the 250 million scam calls that happen every year in the UK – eight every second - and builds on the government’s ambitions to make sure this county works for everyone".

It said cold callers were targeting 11 million pensioners a year, and estimated that around £19m had been lost to pension scams between April 2015 and March 2016.

"Cold calls often present scams as unique investment opportunities, such as investing your pension pot in a new hotel in an exotic location or in various ‘ethical’ projects that promise massive returns," the statement read. 

"Many unsuspecting victims simply fail to spot scams, with nine in ten of those choosing an offer that included warning signs such as 'free' pension reviews, extra tax savings or access to pensions before the age of 55."

Darren Cooke of Red Circle Financial Planning - the financial adviser who launched the parliamentary petition in September - said he was delighted by the result, adding: "I'm not sure I've fully got my head around it."

He insisted he could not take all the credit, singling out former pensions minister Ros Altmann as being particularly instrumental in bringing about the ban.

"I don't think the petition is solely responsible. What we've done is raise the profile over the last few weeks, and maybe given it that shove over the edge," he told FTAdviser.

Baroness Altmann said it was "very, very positive" news, adding: "And about time too. We have to do whatever we can to help people."

She said the ban would send a clear message that if anyone cold calls you, "just hang up". 

"I don't see any downside to a ban on cold calling," she said.

In October, a number of major life companies, led by Royal London, announced their backing of the petition. Shortly afterwards the government began to drop hints it would take action.