The Department for Work and Pensions (DWP) announced it plans to speed up the introduction of the cold-calling ban in its response to a Work and Pensions Committee report on pension freedoms.
DWP response
In its response, the DWP said there should be an outright ban on pension cold calling.
“The government agrees with the committee about the need to address the threat posed by pension scams by cutting off scamming activity at the source to disrupt criminals and protect savers.”
Currently, the government plans to introduce a ban on pensions cold-calling through the Financial Guidance and Claims Bill, however these changes would not come into place until 2020.
The DWP said that it plans to speed up the introduction of a ban by putting forward its own amendment to the Financial Guidance and Claims Bill, which will soon be passed into law, and then produce regulation to introduce the ban.
Light on detail
Jane Goodland, responsible business director at Old Mutual Wealth, said the response is light on detail when it comes to the next steps DWP will take.
“Now the government [has] heeded calls that something needs to be done sooner and are planning to table the amendment.
“Eyes will be peeled on what the new regulation will entail and the pressure is on for them to get it right,” Goodland said.
Unlikely to deter criminals
Goodland warned, however, that a ban can only go so far and will likely not deter criminals.
“What is also needed is an awareness campaign so that people know if they receive a cold call concerning [their] pension that they should speak to Pension Wise, a financial adviser or their pension provider,” she said.
James Walsh, policy lead for engagement, the EU and regulation at the Pensions and Lifetime Savings Association (PLSA), agreed that while the ban is welcome, it is not a water-tight solution.
“Some scammers will still work to find a way around legislation by – for example – calling from overseas,” Walsh said.
Guidance take-up
In addition to the cold-calling ban, the DWP response also addressed the increase in the take-up of guidance when accessing the pension freedoms.
Take-up guidance continues on page 2.
