The work and pensions select committee is calling on the Government to ban pension cold-calling through the Financial Claims and Guidance Bill next year, as well as making people either take or opt out of guidance before accessing their pension.
Committee chair Frank Field says each day a ban is not in place people are being “avoidably conned out of their life savings”.
The committee wants a ban in place by June next year.
Field says the “strongest weapon in the armoury” against scams is good advice and guidance but people are not taking it.
He says: “Making guidance the default option combined with the ban on cold-calling would be a simple but big step forward in consumer protection in the era of pension freedoms. The Government should use the Bill that has just arrived in the commons to legislate to protect pensions now.”
Royal London policy director Steve Webb says: “There can be no excuse for the Government continuing to delay a ban on cold-calling. With every passing week, more and more people are being scammed, and a scam often starts with a call or email out of the blue. The scammers get more inventive and more creative with every passing week, and the danger is that regulators are always two steps behind.”
Hargreaves Lansdown policy head Tom McPhail says it is important the ban and other interventions are properly thought through.
He says: “The ban would have to be policed and would have to avoid interfering with legitimate business activity; guidance at retirement is useful for many but it is questionable this can be delivered effectively to all those approaching retirement by public services alone.”
McPhail adds: “If it is to be made the default, the Government should explore how to harness the resources of the pensions industry to engage and guide its customers.”
Former pensions minister Ros Altmann wants the Government to act urgently in bringing in the cold call ban.
She says: “Making the FCA responsible for banning both cold-calling and also the use of leads obtained from unsolicited approaches would best protect people. FCA implementation could strip firms of their licence if they benefit from cold-calling, thereby undermining the business models of cold-callers most effectively. Cold-calling for mortgages was banned long ago, now we must do this for pensions too.”
The committee will hear evidence on the British Steel Pension Scheme on 13 December, which Field has described as a “honeypot for scammers”.