The UK government yesterday published an 11-page response to the Department for Work and Pensions’ Select Committee’s report of last year on Britain’s pension scam crisis, which outlines details on how it proposes to ban cold-calling, and ways pension scheme members could be better encouraged to make use of the government’s free Pension Wise advice service.
The response comes after months of revelations about the extent to which the so-called pensions freedom legislation, which came into force in April 2015, has enabled scammers to talk holders of British pension schemes out of their savings.
As reported here in November, pensions minister Guy Opperman has stated that as many as 10.9 million people – or roughly one in six people in the UK – are cold-called about their pension each year.
Opperman, pictured left, revealed these and other statistics in a letter to Frank Field, the Labour MP for Birkenhead who is chairing the Work and Pensions Select Committee looking into the issue of pensions freedoms.
Gov’t ‘agrees about addressing threat’
In an introduction to its response, the government says it “agrees with the committee about the need to address the threat posed by pension scams by cutting off scamming activity at the source, in order to disrupt criminals and protect savers”.
It adds that it “also agrees with the committee about the need to ensure more people can benefit from pensions guidance to help them to understand their options and make decisions that are right for them.
“We welcome the committee’s recommendation that the Financial Guidance and Claims Bill 2017 be amended to ensure that people either take or expressly refuse guidance before they can access their pension savings.”
With respect to cold-calling in particular, the government says it agrees with the DWP Select Committee’s assessment that currently proposed measures for dealing with the problem, known as Clause 4, are “flawed”, because they are too slow and because they lack clarity in terms of how they would be enforced “or indeed, whether they would be enforceable”.
“In light of the issues with Clause 4, as drafted, we agree with the committee’s aim of finding an alternative, quicker way to ban pensions cold calling, and recognise the benefits of the proposal that the committee put forward,” the response document continues.
“The government will continue to work swiftly to implement a cold-calling ban by tabling a workable amendment to the Financial Guidance and Claims Bill, and then making regulations to introduce the ban.”
The Work and Pensions Select Committee published its report on the pensions scam crisis in December. It set a June, 2018 deadline “at the latest” for implementing a ban on the use of cold-calling by those looking to solicit pension transfer business.
To read and download the government’s response to the Work & Pensions Select Committee’s third report of session 2017-19, entitled Protecting pensions against scams: Priorities for the Financial Guidance and Claims Bill, click here.
To read the Work and Pensions Select Committee’s report, on the Houses of Parliament’s website, click here.