The government will speed up the introduction of a cold calling ban, the Department for Work and Pensions (DWP) revealed yesterday (12 February).
In its response to the Work and Pensions committee report on pension freedoms published in December, which called for an outright ban on pension cold-calling, the government said "it is important to address the risk of scammers attempting to challenge or circumvent a ban and to ensure that the ban is workable, robust and less liable to legal challenge in the future".
The DWP will speed up the introduction of the ban by putting forward its own amendment to the Financial Guidance and Claims Bill.
As the current bill stands, the single financial guidance body (SFGB), which will merge Pension Wise, The Pensions Advisory Service and The Money Advice Service, will get more powers to fight pensions cold calling.
But this would mean that the ban won’t be in place before 2020, Stephen Barclay, former economic secretary to the Treasury, said in a Parliamentary hearing last year.
The government plans to address this by introducing an amendment to the Bill, which is nearing the stage of becoming law, and then making regulations to introduce the ban, it said.
Jane Goodland, responsible business director at Old Mutual Wealth, said the government had heeded calls that something needs to be done sooner on pensions cold calling.
She said: "Eyes will be peeled on what the new regulation will entail and the pressure is on for them to get it right.
"Particularly since in 2013, 97 per cent of pension fraud cases brought to Citizens Advice stemmed from cold calling, according to the government’s consultation response to the cold calling ban."
James Walsh, policy lead for engagement, EU and regulation at the Pensions and Lifetime Savings Association, said that even though the cold calling ban was welcome, "it is not a water-tight solution".
He said: "We look forward to continuing to work closely with government to tackle this issue."
Another area addressed by the government in this report was the increase of the take-up of guidance.
While acknowledging the improvement in appointment numbers on Pension Wise, the government agreed about the need to increase take-up of free, impartial guidance and said it was "committed to finding ways to reach more people and continue to deliver an effective service".
But the government removed an amendment to the Financial Guidance and Claims Bill in January which would have automatically enrolled people into money guidance at the point accessing their retirement funds.
Ms Goodland said: "This removal was necessary as the amendment demands default guidance for those who have decided to access their tax-free cash needs a re-think.
"If a person has already made a decision then any guidance at that point is too late.
"People should be getting help earlier in the decision-making process and that is something the government needs to work harder to promote."