Former pensions minister Baroness Ros Altmann has said that far too many people are losing their pensions to unscrupulous fraudsters who are enticing them into transferring their hard-earned savings into pension schemes that are unsuitable or even fraudulent.
Prestiging Parliament's Work and Pensions Select Committee who will be calling on the government to urgently improve pension protection for the general public in the UK, Baroness Altmann said:
"Cold-calling for mortgages was banned a few years ago, we urgently need to do the same for all unsolicited approaches on pensions (and possibly other financial products too) before more people lose their hard-earned savings. There is an ideal opportunity to legislate, as the Financial Guidance and Claims Bill is going through Parliament at the moment. Thanks to the hard work of the House of Lords, a cross-party group of peers forced the Government to add important amendments to the Bill, including a requirement to ban cold-calling."
The increase in the number of pension scams in the UK has been put down to two main factors. Firstly, the introduction of pension freedoms has meant that people now have a lot more choice as to what they do with their pension pot, previously only being able to purchase an annuity. Secondly, the new rules also make transferring out a final-salary pension much more attractive (and hence making it much more attractive to scammers.)
The answer, according to Baroness Altmann is to give more power to the Financial Conduct Authority.
"The best way to protect the public is to make the financial services regulator, the FCA, responsible for banning both cold-calling and also the use of leads obtained from unsolicited approaches. The FCA has a close relationship with pension providers and they need to be regulated in order to operate. By threatening to strip any regulated firm of their licence if they use any leads they receive from another company that has cold-called customers and passed on their details, the business models of cold-callers would be undermined more effectively."