If you are following up on the Treasury’s announcement over the weekend that the Government will ban pensions cold calling, below is a comment from Tom Selby, senior analyst at AJ Bell:
All calls where a business has no existing relationship with the individual will be forbidden
Providers to be handed extra powers to block suspicious transfers
Government also set to unveil crackdown on abuse of small self-administered schemes (SSASs)
“The scourge of pension scams has already caused huge damage to thousands of savers’ retirement dreams, with many left penniless after being targeted by increasingly sophisticated fraudsters. The combination of measures set to be announced by Chancellor Hammond should act as a real deterrent to scammers and sends a clear signal the Government is at last taking this issue seriously. We look forward to seeing further details at the Autumn Statement.
“SSASs are a legitimate retirement planning vehicle that have been abused by scammers. For example, we have seen large numbers of savers attempting to join suspicious SSASs who have no connection to the employer linked to the scheme. Tackling such abuses would protect savers and help clean up the SSAS market.
“Providers have also struggled to block suspicious transfers in the wake of the Hughes v Royal London High Court ruling. This said savers have a legal right to transfer even if they do not have earnings from the employer linked with the scheme – and even where there is evidence the scheme is being run by scammers. Since this case there has been a need for policymakers to redress the balance so providers have the power to protect scheme members.
“However, this welcome move by the Chancellor must be seen this as the beginning of the process of tackling pension scams, not the end. Banning cold calling will cut off one of the heads of this many-headed beast, but the Government, regulators and industry must remain vigilant and consider what further measures might be necessary to deter fraudsters.”