Millions of pensioners are being targeted annually by cold callers in the wake of the recent changes to allow more freedoms for pensions.
Baroness Altmann, a former pensions minister, has said that she repeatedly tried to ban cold calling for pensions but was blocked by officials who claimed that it “wasn’t possible”.
However, things have changed as Philip Hammond, the chancellor, intends to announce plans to make cold calling of pension savers illegal in his first Autumn Statement as part of a wider crackdown on scams.
Cold callers often offer investment opportunities, such as investing your pension pot in a new housing estate or garages or a hotel in an exotic location.
Pension scams have been a growing concern for policymakers since Mr Osborne’s flagship changes to pension rules in April 2015 that gave millions of over-55s full freedom to cash in their cash and this created new opportunities for fraudsters.
An estimated £19 million was lost to pension fraud in the first year of the pension freedoms, as people cashed in around £6bn of their retirement savings.
- What Are The Government’s Plans?
All cold calls where a business has no existing relationship with the individual will be forbidden.
- Those include scammers targeting people who inadvertently “opt in” to receiving third-party communications.
- Enforcement action by the Information Commissioner’s Office could include fines of up to £500,000.
- The government wants to give pension providers more power to block suspicious transfers and to make it harder for scammers to set up a pension plan to facilitate fraudulent transfers.
The Police have said that the amount of money being taken from pensioners in scams relating to pensions scams has almost doubled in the past year from £10m to £18m.
The government is expected to outline further steps on its proposals in the 2017 Budget.
Phillip Hammond claims the move, will protect millions of vulnerable people and cut off the main route through which cowboys trick people out of their life savings.
In his first major Commons set-piece statement, the Chancellor will pledge to bring an end to the misery brought about by the millions of scam calls that happen every year in the UK.