Retirement savings will be protected from scammers when Chancellor Philip Hammond bans pensions cold calling in next week’s Autumn Statement.
The Treasury hopes that the move will eliminate 250 million scam calls each year in the UK at a rate of eight every second.
Some 11 million pensioners are targeted each year by cold callers, losing an estimated £19 million during the 2015/16 tax year.
Pensions scams come in many forms, with some of the most common promising “unique” investment opportunities that boast of unrealistic double-digit returns.
These lies can result in people losing their life savings completely, and in some cases being slapped with a tax bill to add insult to injury.
- Read about the 10 most common scams
How the Government is cracking down on pension fraud
Under the proposed new regime, financial companies will not be allowed to phone consumers unless they already have an existing relationship. The rules will cover people who might have inadvertently “opted-in” to receiving communications via a third party.
Companies in breach of the rules will be hit with fines of up to £500,000.
The Chancellor will also consult on other initiatives to crack down on pensions frauds, including giving more power to pensions companies to refuse to transfer pensions to suspicious looking companies, and making it harder for scammers to option sham pension schemes.
Consumers and the industry will have until the end of the year to provide feedback on the proposals, before next steps are announced in the 2017 Budget statement.