A pensions cold calling ban is to be put in place by June this year, as the government has tabled an amendment to the Financial Guidance and Claims Bill.
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. Committee chair Frank Field said he is “delighted” that the ban is being brought forward, adding that the “government is now almost there”.
“This represents a major leap forward in the urgent fight to protect pensioners’ savings against scams and sharp practice,” he said.
In addition to the cold calling ban, the government has tabled other amendments to the Bill that take forward key recommendations from the Committee. For example, the government has tabled amendments to clause 19 of the Bill on the provision of pension guidance.
Amendment 13 requires pension schemes to ensure that an individual seeking to access pension savings is “referred to appropriate pensions guidance” and “has either received appropriate pensions guidance or has opted out of receiving such guidance”. This echoes the Committee’s recommendation that individuals, subject to appropriate exceptions, be required to receive or expressly refuse independent guidance before being granted access to their pension pot.
Furthermore, amendments 13 and 14 remove the reference to independent financial advice, in order to ensure that clients are to be directed towards the independent guidance service. The explanatory statement to these amendments indicates the government’s intention that this guidance will be provided by the new Single Financial Guidance Body. Amendment 15 makes clear that the Financial Conduct Authority’s rules should make provision about how individuals are to indicate that they have received guidance or expressly opted out.
“On pension guidance, the government has moved much closer to the Committee’s aspiration that the taking of independent expert guidance should be the default course of action when accessing a pension pot,” Field added.
“The government can now give even greater reassurance by explicitly specifying on the face of the Bill, rather than in an explanatory memo, that the public guidance body will be the sole source of the ‘appropriate pensions guidance’. Guidance must come from independent and impartial experts, rather than from self-interested pension providers, if individuals are to make the best use of their savings.
“I very much welcome this proof of the government’s commitment to listening to the Committee and other expert opinion in shaping these vital protections. I look forward to this constructive engagement continuing as the Bill proceeds through the House.”
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