The government will find a “quicker way” to introduce a pensions cold calling ban, but has not set a deadline, according to the Department of Work and Pensions.
Responding to the Work and Pensions Committee's proposals yesterday (12 February 2018), the DWP said that it agrees with the Committee’s proposals that the Financial Guidance and Claims Bill should be delivered sooner than proposed, but does not say when.
The DWP said that it will “continue to work swiftly to implement a cold calling ban” by tabling a workable amendment to the Bill, but did not commit to the Committee’s recommendations of introducing a ban by June 2018.
The DWP said: “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 government agrees with the intent and principles of the Committee’s proposed amendment, and will shortly bring forward its own amendment, which will build on this further. It is important to address the risk of scammers attempting to challenge or circumvent a ban and to ensure that the ban is workable, robust and less liable to legal challenge in the future.”
Despite this, many in the industry feel that the government’s response did not give enough information on when this happen and also called for tougher action.
Old Mutual Wealth responsible business director, Jane Goodland, said: “Pension scams are a serious problem and it is crucial that it is met swiftly by the government. However, their response to the Work and Pensions Select Committee report was light on details of their next steps.
“That ban would take two years to implement. Now the government have heeded calls that something needs to be done sooner and are planning to table the amendment. Eyes will be peeled on what the new regulation will entail and the pressure is on for them to get it right.”
Pensions and Lifetime Savings Association policy lead on engagement, EU and regulation,James Walsh, said: “We are pleased to see that the government has chosen to move more quickly on tackling pensions scams and this announcement is a useful step forward.
"However, while the cold calling ban is welcome, it is not a water-tight solution. Some scammers will still work to find a way around legislation by – for example – calling from overseas. We look forward to continuing to work closely with government to tackle this issue.”
According to the government’s consultation response, 97 per cent of pension fraud cases brought to Citizens Advice stemmed from cold calling, but Goodland believes an awareness campaign is also needed to let people know they should be speaking to Pensions Wise.
The government also said it is looking to implement “high-quality, multi-channel guidance” as they seek to “strengthen the nudge towards pensions guidance”.
AJ Bell senior analyst, Tom Selby, said: “The government’s work around boosting Pension Wise guidance is more positive, however. By engaging with providers to test innovative ways to boost take-up – including potentially automatic guidance – we can ensure engagement and understanding of retirement saving is improved without creating unnecessary unintended consequences.
“This testing should cover a range of different nudges at different points in the retirement savings journey.”
The government also said that it remains fully committed to the pension freedoms, but was intent on raising awareness of the Pensions Wise service.