Chancellor Philip Hammond to announce ban on pensions cold calling in Autumn Statement next week

Francesca Washtell
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Cold callers often lure people into exotic or exciting-sounding investment schemes (Source: Getty)

Pensions cold callers who target the elderly and trick them out of their life savings will be banned in chancellor Philip Hammond's Autumn Statement this week.

Around 250m scam calls are made every year, or equivalent to eight every second, the government said today.

Cowboy cold callers prey upon almost 11m pensioners a year and savers reported estimated losses of almost £19m to pensions-related scams between April 2015 and March this year.

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Callers often lure pensioners into trick schemes by presenting them as unique investment opportunities, such as putting their pension pot in a new hotel in an exotic location or in "ethical" projects promising huge returns.

Hammond's Autumn Statement proposal will forbid all calls where a business has no existing relationship with the individual, which includes scammers targeting people who inadvertantly "opt-in" to receive third-party communications.

This will be enforced by the Information Commissioners Office and could include hefty fines of up to £500,000 for cold callers.

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Hammond will also consult on a wider crackdown on pensions scams by giving more powers to firms to block suspicious transfers, which will prevent people's life savings from being transferred to a scheme without any checks, and making it harder for scammers to open fraudulent pension schemes. This will be addressed by stopping self-administered schemes and setting up using a dormant company as the sponsoring employer.

The government will consult on these proposals by the end of the year and introduce next steps for the policy in the March Budget.

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"Pension scams can ruin people's retirement, sometimes casting a permanent blight on their quality of life, for the rest of their lives," said Tom McPhail, head of retirement policy at Hargreaves Lansdown.

Investors need protecting from unscrupulous unregulated salesmen, so we welcome this announcement. The government's plans to make it harder to register scam pensions in the first place and to make make it easier for legitimate pensions businesses to block suspicious transfers are also important and welcome developments.

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