Pension cold calling ban welcomed
The third reading of the Financial Guidance and Claims Bill which was due this week (12th March) has been postponed, but most of us in the professional pension sector welcome the proposed amendments to the Bill.
Unsolicited direct marketing has been worrying the government and all of us in the industry since the pensions reforms of 2015 were introduced. One unintended consequence of the reforms has been an increase in pension scams. It’s something that Work and Pensions Select Committee Chair Frank Field has expressed grave concern about for some time.
Mr. Field argued that the legislation needed to be fast tracked as, every day without it, pensioners could be conned out of their hard-earned savings. It looks like the Committee’s lobbying and hard work has paid off and the measure could be in place as early as June
Frank Field, said:
I am delighted that they will be bringing forward a ban on pensions cold calling by June, as we called for. This represents a major leap forward in the urgent fight to protect pensioners’ savings against scams and sharp practice.
The legislation will also cover banning information obtained through direct marketing for commercial purposes and also has the backing of Baroness Altmann. She said:
To be effective, it is vital that any ban on cold-calling is backed up by a regulatory ban on use of information obtained as a result of unsolicited approaches.
There is also an official Labour amendment that asks for the financial guidance body set up by the Bill to provide “mid-life reviews” for people over the age of 50, to prepare them for retirement. A survey published recently in www.thehrdirector.com states that over 80% of employers believe their staff are not saving enough for retirement and that financial education is key. Employees are unaware of the risks around their retirement income and many will make poor choices.
As professional trustees we are passionate about protecting the best interests of the scheme members that we represent. We therefore welcome the proposed amendments which should go some way to help advise and protect people and their pensions.
However, it remains to be seen whether the message will effectively filter through to all consumers. Eleven million people are cold called about their pension in Britain every year and they are targeted by very sophisticated scammers, often from overseas. There is a huge job to do in getting the message across, and employers and our colleagues in the industry can play a big part in this.