The Government has launched a consultation on three types of measures to tackle pension scams.

The measures include a ban on cold calling in relation to pensions to help stop fraudsters contacting individuals.

The consultation states that pension scams can cost people their life savings, leaving them to face retirement with "limited income and little or no opportunity to build their pension back up."

It says: "The government is committed to protecting people from pension scams and pursuing those who perpetuate pension scams wherever possible."

Banning cold calling ban, the government says, will cut off a key source of pension scams while also sending a clear message to the public that they should hang up if they receive a cold call about their pensions.

As well as the ban, the consultation report proposes greater scope for legitimate schemes to block transfers to fraudulent schemes.

Current legislation gives pensions schemes limited scope to refuse a transfer to a scheme which looks like a scam, even if they have legitimate concerns about the safety of a member's savings.

The government proposes to introduce clear objective criteria and clarify the law to enable firms to block fraudulent transfers.

The final measure is to introduce a requirement that only active companies can register a pension scheme.

Single member occupation pension schemes currently don't need to register with The Pensions Regulator, and can be set up using a dormant company as the sponsoring employer – an easy way for fraudsters to register a scheme with HMRC.

David Brooks, technical director at Broadstone, welcomed the consultation: "It's great news that the government is looking to address this growing problem."

"A review of the statutory transfer is a good idea and anything that does not bring Trustees into a collision course with members or puts Trustees at the frontline as policemen is the best course of action," he said.

The consultation closes on13 February 2017.

First published 08.12.2016

Lindsay.sharman@wilmingtonplc.com