Cold-calling ban will be in place by 2020, minister confirms
A ban on pensions cold-calling will be in place before the start of the next decade, a Treasury minister has told the Work and Pensions Committee (WPC).
The ban, which was announced in the 2016 Autumn Statement and confirmed this summer, will be put to parliament and the public for consultation via draft legislation next year.
It will prohibit phone calls, text messages and e-mails regarding pensions from firms to which an individual does not have a prior connection.
The timetable was confirmed by economic secretary to the Treasury Stephen Barclay, although he refused to provide a steadfast date, stating he did not want to make a commitment that "are often not kept" by politicians.
Giving evidence to the WPC's inquiry into the pension freedoms, Barclay said it was the government's intention to introduce the ban as quickly as possible, but to ensure that it was right.
He added that the government does not plan to "fundamentally amend" the House of Lords' amendment to the Financial Guidance and Claims Bill to mandate the upcoming single financial guidance body (SFGB) to produce an annual report on cold calling. However, he said introducing the ban via this method would mean the ban would not be effective until 2020.
"How do we this as quickly as possible? The concern is that the amendment… says the single financial guidance body can bring an annual report.
"To some extent if one followed that amendment through to conclusion, you would have an earliest date of 2020. We have an ambition to act before 2020."
This legislation will be "informed by the [WPC's] session," he also said.
Asked why the government has not just amended the bill itself to introduce the ban, Barclay said it was important that the legislation is consulted on.
"Within the draft of the legislation, one needs to look at how to balance it against the legitimate marketing," he said. "That detail needs to be consulted on, which is why we need the draft legislation.
"We want to get the legislation right, because there is complexity… but there is a commonality of interest that no-one wants to see people being ripped off.
"How do we land the legislation in the right way? It's not about giving a firm date; it's about how do we get the policy right?"
He also said introducing the ban was not as simple as a similar rule for mortgages, stating this was different as it was passed through Financial Conduct Authority (FCA) rules, whereas pensions require a different mechanism.
Guidance
Pensions and financial inclusion minister Guy Opperman also rejected suggestions that take-up of Pension Wise guidance was "abysmal", as put by WPC member Steve McCabe MP, and disputed the need for the guidance to be made mandatory in cases of pension transfers.
"We don't believe mandating [guidance] is the appropriate way forward," he said. "We acknowledge and accept that there is a legitimate and correct debate about how can we improve the quality of [guidance] services."
"After much consideration, the decision was made to create the SFGB," he continued. "We should be addressing better ways to give guidance and going forward the hybrid version is the right way forward."
Asked whether there needs to be a default pathway at retirement, Barclay hinted the government would consider this in the future: "We need to be conscious of the danger of defaulting individuals into unsuitable [decumulation] products, but it is something we are going to look at."
More on Law and Regulation
2021 outlook: What's next for regulation?
After a year that took everyone by surprise, experts tell Professional Pensions what could be on the horizon for regulation in 2021.
TPR bans corporate trustee and its director for 'serious' failings
The Pensions Regulator (TPR) has banned a corporate trustee and one of its directors from acting as pension scheme trustees after multiple governance failures highlighted a lack of competence, capability and integrity.
Equalising transfers: What if there was another way?
Steve Nicholson looks at how schemes can go about implementing the most recent Lloyds ruling
MNRPF trustees replaced after ignoring governance recommendations
The Merchant Navy Ratings Pension Fund (MNRPF) has replaced every member of its trustee board following a drawn-out battle with The Pensions Regulator (TPR) to improve governance.
DWP taskforce sets out actions to enable large-scale consolidation of deferred small pots
The small pots working group has made a number of recommendations on how to tackle the growth of deferred members with small pension pots within the AE pensions market – urging the government and industry to take action to enable large-scale mass transfers....
Most read
