Government resistance to pension freedom changes that would better protect consumers is “difficult to understand” and must change quickly, MPs have been told.
Ex-pensions minister Baroness Ros Altmann told the work and pensions committee her efforts to bring in a cold-calling ban had been blocked by civil servants at the Treasury and Department for Work and Pensions.
Altmann said she struggled to understand the government’s positio, adding that, while amendments to the Financial Guidance and Claims Bill had passed in the House of Lords, it was not the ideal way to bring in better consumer protection.
The latest amendment to the bill was passed in the House of Lords last night, which would see everyone who wanted to access their pension automatically referred to impartial guidance from Pension Wise or its forthcoming replacement. A different amendment to ban cold-calling was passed following a debate last week.
Speaking this morning, Altmann said: “We were desperately trying to ban cold-calling. Resistance was coming from the civil service. I had numerous meetings where I was given reasons why we couldn’t.
“When I asked written parliamentary questions later it turned out that a number of reasons they gave me were not valid.”
She added: “I kept going back and trying to have more meetings on the subject. I do think the government has now recognised we need to do this – if the government does want to do this, it needs to act quickly. We need to stop people being scammed.”
Pension Wise chief executive Michelle Cracknell agreed pension cold-calling should be outlawed, saying: “We need to put out a very clear message that you are never allowed to be contacted out of the blue. I think that would be a very clear message to get across.
‘Perfect storm’
“We have to recognise that pensions are always going to be rich pickings. We have the perfect storm – low levels of knowledge coupled with the biggest or at least second biggest asset people have got. People must be made to feel very wary about giving away pension information.”
Altmann, who was pension minister from April 2015 to July 2016 and now sits in the House of Lords, described the latest amendment to the Bill as a “massive step forward” but added: “I am struggling to understand the government’s position. I do not understand why the government has resisted.
“[The amendment] would automatically enrol people into guidance. Anyone who called up their provider to transfer or take money out would automatically be given an appointment with Pension Wise. Not enough people are using it.”
She also accused providers of trying to “capture” customers looking to access their pension pots instead of helping them get the best outcome.
The ex-minister said many providers were “good at pretending” to pass on clients to Pension Wise but were much more interested in keeping them as customers.
“Before the provider is allowed to capture the customer it should be automatic that they have the chance to speak to Pension Wise,” she said.
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