The UK government announced yesterday that it would ban cold-calls and tighten protections against transfers to fraudulent schemes.
It is hoped that this “two-pronged” attack on scammers will not only put a hurdle in the way in which fraudsters contact would be retirees, but will also limit their options in getting access to savings.
Former pensions minister, Baroness Ros Altmann, said: “The government has bowed to the overwhelming pressure from politicians, consumer groups and the pensions industry to urgently introduce a ban on pensions cold-calling.
“This is great news. It is also going to toughen rules on transfers out of occupational schemes and tighten HMRC requirements that will make it much more difficult to set up fraudulent schemes.”
Yesterday’s announcement means that only companies that produce regular accounts will be approved as pension schemes.
Trustees of occupational pensions will then be required to check that receiving schemes are regulated by the FCA, or are authorised as master trusts, or have a clear employment link.
This comes after research by Xafinity Consulting [Xafinity PLC (LON:XAF)] found that fraudsters could have been behind 11% of the 30,000 defined contribution scheme transfers in 2015/16, which represented £1bn in assets.