For the first time in my life I have my very own garden. The only problem is I have no idea what to do with it. I have started to read gardening books for ideas and inspiration but to me it is like they have been written in a foreign language, using terms like “biennial” and “dead-heading”, as if I should know what they mean. I have also received gardening tips and advice from all sorts of people.
I imagine some people feel a similar sort of bewilderment when they think about their pension savings. Then someone calls them ‘out of the blue’, offering to provide them with a free review of their pension savings, an amazing investment opportunity, or a way for them to access their pension without having to wait until they attain the current minimum retirement age of 55. I can appreciate why people sadly get taken in by pension scams and how their pension savings can be put at risk as a result.
I can also see the need for the government to step in and protect people from pension scammers. It is therefore disappointing that the Financial Guidance and Claims Bill, which is currently working its way through the House of Lords, does not include a ban on pension cold calling.
Back in December last year, HM Treasury and the Department for Work & Pensions launched a Consultation, seeking feedback on what could be done to tackle different areas of pension scams, including pension cold calling. Citizens Advice had calculated that, during the period from April 2015 to March 2016, 10.9 million people had received unsolicited contact about their pensions and the Treasury found that “cold calling is the most common method used to initiate pension fraud”.
“The government has chosen to consult on a ban on cold calling in relation to pensions as a priority as, for many people, their pension is their single biggest asset (aside from their property), on which they will depend throughout their retirement. Pension scams can have devastating consequences such as the loss of an entire pension fund, and the chances of recovering these losses are very low, leaving victims without the means to fund their retirement. Banning cold calling in relation to pensions will cut off scams at the source, encouraging consumers to put the phone down immediately.”
Their response to the 111 submissions to the Consultation was initially due in “late spring” but, probably as a result of the snap General Election, was not published until 21 August.
Pleasingly, the Consultation Response confirmed that pension cold calling, including emails and text messages, is to be banned. Minister for Pensions and Financial Inclusion, Guy Opperman said;
“If people have saved for a private pension, we want to protect them. By tackling these scammers, people should know that cold calling, apart from exceptional circumstances, is banned.”
Encouraging words indeed – but the opening paragraph to the chapter on cold-calling soon brings the reader back down to earth (and my garden);
“The government intends to work on the final and complex details of the ban on cold calling in relation to pensions during the course of this [two-year Parliamentary] year, then bring forward legislation to deliver the ban when Parliamentary time allows” (my emphasis).
"Figures released with the Consultation Response showed that almost £5 million was obtained by pension scammers in the first five months of 2017"
Given the likely domination of the ‘Brexit’ legislation within Parliament from now to March 2019, my garden will probably resemble a Capability Brown landscape, before the ban is introduced.
Figures released with the Consultation Response showed that almost £5 million was obtained by pension scammers in the first five months of 2017, demonstrating that time is of the essence where imposing a ban is concerned.
And industry reaction to the envisaged procrastination can be largely summarised by the phrase, “get on with it!”
Given the importance of addressing this issue, it is encouraging that former Pensions Minister, Baroness Ros Altmann, is still championing the ban;
“If others do not, I hope to table a probing amendment in Committee, as it is one that I feel so strongly about and had hoped would be resolved”.
So what can people do in the meantime to protect themselves?
- Get the right support and advice from reputable financial advisers who specialise in pensions and who are authorised and regulated with the Financial Conduct Authority. Free and impartial government guidance for those aged 50 and above can also be accessed through Pension Wise;and
- Hang up the phone on pensions cold callers.