New measures to protect savers from pension scams have recently been confirmed by the government.
In the announcement made on Sunday, it was stated that the proposed ban on cold calling will now be extended to cover text messages and emails, with an aim to reduce risk exposure across multiple channels.
A tightening on HM Revenue & Customs rules was also put forward to prevent fraudulent pension schemes being opened by scammers, as well as greater measures to stop money being transferred between occupational and fraudulent pension schemes.
Pension schemes will only be able to be registered by active companies that regularly deliver up-to-date accounts. As outlined in a statement from the government, limiting pension pot transfer will mean trustees have to make checks on their receiving scheme, meaning risks could be identified at an earlier stage.
In regard to the ban on calls, AJ Bell has stated that exemptions will apply in two kinds of circumstance – where an existing client relationship exists and where information has been expressly requested by a consumer.
Commenting on the ban on the need to monitor its effectiveness was Tom Selby. The senior analyst at AJ Bell stated that whilst it was a good place to start, the measure did not mark the end of the battle against fraudsters.
“This must be seen as the start as the fightback against scammers rather than the end, however. Policymakers should monitor the effectiveness of these measures closely and consider further changes if savers continue to be pick-pocketed by fraudsters.”
The ban on pensions cold-calling was originally confirmed in last year’s Autumn Statement. During the first five months of 2017, nearly £5 million was obtained by pension scammers according to the government. They have also estimated that since the start of 2014’s financial year, around £43 million has been illegally obtained by scammers, with victims suffering an average loss of almost £15,000.
Guy Opperman, the pensions and financial inclusion minister, highlighted the significance of the sum in funding later life and thus the vitality of ensuring it is protected.
“If people have saved for a private pension, we want to protect them. This is the biggest lifesaving that individuals normally make over many years of hard work. By tackling these scammers, people should know that cold calling, apart from exceptional circumstances, is banned.”
