As the government’s long-awaited pensions cold-calling ban finally comes into force today, leading figures from the pensions industry ask whether or not it will be successful in protecting savers
After your home, your pension will likely be the biggest financial asset you have and to see people robbed of this by scammers is devastating. We wholeheartedly support a ban on pension cold-calling.
As your retirement could last 20, 30 or even 40 years, seeking professional financial advice could help you enjoy the retirement you want.
Unfortunately, too few people currently seek financial advice – put off by traditionally prohibitive costs, confused about how personalised advice could help them and undeserved by an industry unwilling to serve swathes of the population. This means too many people are faced with making big financial decisions on their own.
Nutmeg head of financial advice Lisa Caplan
The government has finally legislated to prevent the making of unsolicited direct marketing calls, but it remains to be seen how successful this measure will be in the deterring of pension scammers, in particular how well members will understand that any cold call they receive is not just unwelcome, it’s also illegal.
XPS Pensions Group head of research Jane Beverley
We welcome these regulations to ban cold calls in relation to occupational and personal pension schemes. The Pension Scams Industry Group called for a change in the law when we first published our voluntary Code of Good Practice in Combating Pension Scams in 2015, so we are encouraged to now be seeing this coming into force.
Of course, a ban on cold calling will not deter all scammers, but anything that makes it more difficult is a good thing. A significant public awareness campaign will now be vital to ensure that the man in the street is aware that cold calls about their pensions are now illegal.
PSIG was first established to focus on the non-legislative actions the industry can take to help reduce the number of transfers into rogue arrangements and version 2.1 of our Code of Conduct will be published before Spring. We are also working on how to collect and share information on scams to help empower schemes and providers who want to support their prevention.
Pension Scams Industry Group chair Margaret Snowdon
Whilst this is clearly a significant moment in the continuing battle against the scammers, we should remind ourselves that nothing has been done to enable trustees to stop transfers taking place where they have clear concerns, have warned the member, but that member wants to proceed anyway.
Surely it is not beyond the wit of policymakers to deliver a system under which trustees can block transfers to dodgy destinations without trampling over the broader right of the member to transfer?
LCP partner David Everett
Almost four years after the retirement freedoms were introduced the government has finally taken a much-needed step to tackle the scourge of pension scams.
However, prohibiting cold-calling is only part of the solution and will by no means eradicate the threat of scam activity altogether. Pensions remain a juicy target for fraudsters and some will inevitably look to circumvent the ban or simply ignore it altogether.
The message to retirement savers from now on is crystal clear: if someone you don’t know calls out of the blue about your retirement pot, hang up the phone.
AJ Bell senior analyst Tom Selby