Pension cold-calling could be banned by June

Pension cold-calling could be banned by June

A new amendment to the Financial Guidance and Claims Bill could see pension cold-calling banned by June.

The amendment tabled by the Treasury on 5 March says the regulations underpinning the ban on pension-related cold calls should be made by the Secretary of State before the end of June.

If the power is not exercised by June, the Secretary of State for Work and Pensions, currently MP for Tatton Esther McVey, must explain to parliament why not.

The amendment states: “The Secretary of State may make regulations prohibiting unsolicited direct marketing relating to pensions.

“If before the end of June in any year the Secretary of State has not made regulations under this section (whether or not in that year), the Secretary of State must publish a statement, by the end of July in that year, explaining why regulations have not been made and setting a timetable for making the regulations, and lay the statement before each House of Parliament.”

A Treasury spokesperson confirmed the bill's wording applies to June this year.

She said the amendment would allow for the ban to be brought in more quickly, as it does not require the Secretary of State to receive advice from the Single Financial Guidance body before making regulations to introduce the scheme.

The amendment also gives the Secretary of State powers to ban cold-calls on further financial services products following deliberation with the new financial guidance body.

The amendment builds on a recommendation from the Work and Pensions Select Committee ‘s recent report on pensions freedoms, which called for an outright ban on pension cold-calling.

The DWP said in its response to the report in February it would speed up the introduction of a cold calling ban by tabling its own amendment to the bill and then making regulations to introduce the ban.

Under the old version of the bill, the single financial guidance body (SFGB), which will merge Pension Wise, The Pensions Advisory Service and The Money Advice Service, would have been given more powers to fight pensions cold calling.

But this would have meant the ban would not have been in place before 2020, Stephen Barclay, former economic secretary to the Treasury, said in a parliamentary hearing last year.

Frank Field, chairman of the Work & Pensions Committee, said about the latest amendment: “The government is now almost there, within spitting distance of what the committee proposed.

"I am delighted that they will be bringing forward a ban on pensions cold calling by June, as we called for. This represents a major leap forward in the urgent fight to protect pensioners’ savings against scams and sharp practice."

Darren Cooke, a Chartered Financial Planner at Red Circle Financial Planning, who has been fighting for the introduction of such a ban for months, said he was pleased by the "big shift".