Autumn Statement  

Tweaks proposed to Hammond's anti-pension scam measures

Tweaks proposed to Hammond's anti-pension scam measures

The industry has responded enthusiastically to the government's policies to tackle pension scams, with many already recommending additional measures ahead of an imminent consultation paper.

The policies were announced on Saturday (19 November) ahead of chancellor Philip Hammond's Autumn Statement.

The measures included a ban on cold calling, giving firms the power to block suspicious transfers, and preventing the use of dormant companies to set up small self-admistered schemes (Ssas).

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The Autumn Statement document added nothing to the substance of Saturday's announcement, but revealed the government would consult before legislating the final measures.

Tom Selby, senior analyst at AJ Bell, said the measure was "a great intervention in the battle against scammers", adding: "We are looking forward to seeing the detail of the consultation before Christmas". 

"However, more can be done and the cold calling ban must be viewed as the start of a long-term drive to defeat pension fraudsters and not the final solution."

He suggested savers be given early access to their tax-free cash where they can demonstrate financial hardship, in an effort to stop people struggling financially from being lured by scammers' promise of high returns.

He also recommended reintroducing a list of permitted investments for Sipps.

Rachel Vahey, product technical manager at Nucleus, said a complete ban on cold calling would be difficult to implement, especially if made from overseas.

However, she said the ban on cold calling was an important step.

"A ban on calls in the UK is an important first step but we also want the ban to include texts and emails, especially as we move towards a more technologically developed world," she said.

She urged the government to work with other countries to establish an international campaign to tackle the problem of overseas calls.

Kate Smith, head of pensions at Aegon, said the most valuable aspect of a ban would be the awareness that it would bring to consumers.

"The true extent of pension fraud is unknown, and some people may not realise they have fallen victim to a scam for some time. Once a scam has taken place it’s almost impossible to get the money back," she said.

She said she hoped the consultation would leave room to tackle cold texts and emails as well as phone calls.

Anthony Carty, business development director at Clifton Asset Management, welcomed the ban on cold calls, but questioned the targeting of Ssas.

He urged the government to "avoid genuine entrepreneurial investors being discouraged" from using Ssas, arguing they could "be a highly effective pension, tax and estate planning tool for the business owner".

"It has been common for business owners to set up a Ssas and hold their premises - whether offices or factories - in the pension in order to benefit from the tax-free income and growth on the property, but an increasing number of businesses are now using the flexibility of a Ssas to invest in their own business – funding it to boost growth."