The Financial Guidance and Claims Bill has received royal assent today, 10 May 2018, giving pension members greater protection against potential scammers.

The Bill, which has been in the planning for almost a year, will make it illegal for you to be cold-called about your pension and will also make it trustees and pension providers responsibility to ensure members get appropriate guidance before accessing their pensions.

Originally expected to pass in June, the government will review the ban before determining whether to roll it out to other financial products.

Aegon head of pensions, Kate Smith, said: “Growing at an exponential rate, pension scams have been a menace for years. The pensions cold-calling ban will do more to protect savers, but for some unfortunately it’s been far too late in the day.

“The sad fact is that the ban is unlikely to give anywhere near 100 per cent protection from scammers who will simply ignore the law, while it gives no protection for scammers based overseas.”

According to Smith, the ban is unlikely to be effective alone and now people must be made aware that people cold-calling them about their pension is illegal.

“The government must carry out a media blitz raising public awareness, not once but many times to make sure the message gets through not just to the public but to potential scammers too.

“The good news is that HMRC is already trawling its pension scheme database and deregistering illegitimate schemes since April”, she added.

The idea to introduce a ban by June was a suggestion made by the Work and Pensions Committee in December 2017, as it warned the government action is desperately needed to protect individuals from scammers.

Work and Pensions Committee chair has welcomed the Bill passing into law but he has written again to the Economic Secretary to the Treasury, with further questions on the detail of, for example, what will constitute “unsolicited direct marketing”.

The Committee is concerned about practices such as “factory-gating”, uncovered in evidence in the British Steel Pension Scheme part of the inquiry. This practice sees “introducers” working on behalf of financial advice firms approach scheme members in person, sometimes offering incentives, either near their workplaces or at roadshow events organised by the Scheme itself for people facing complex choices about their pensions.

In the letter, published today, the Chair notes that “it is easy to imagine how a skilled marketer could use the opportunity of a face-to-face conversation to gain the trust of a ‘prospect’ and persuade them into a particular course of action. When the ‘cold call’ is in person, it is not simply a matter of putting the phone down or deleting a spam email.”

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