Chancellor Philip Hammond will ban pensions cold calling in the Autumn Statement next week with scammers facing fines of up to £500,000.
Under the proposed regime, all calls where a business has no existing relationship with the consumer will be forbidden. This includes scammers targeting those who are opted-in to receiving third-party communications.
The announcement follows the pensions sector getting behind a petition to ban pension cold calling that was started by Red Circle Financial Planning director Darren Cooke in September.
The proposals also include wider measures to crack down on pension scams including giving firms more powers to block suspicious transfers.
The proposals will also suggest making it harder for scammers to open fraudulent pension schemes. It plans to do this by stopping small self-administered schemes from setting up by using a dormant company as the sponsoring employer.
A statement from the Treasury says there is one pension cold call made every eight seconds with almost 11 million pensioners targeted each year.
According to the Treasury, savers reported estimated losses of almost £19m to pensions scams between April 2015 and March 2016.
The Treasury statement says: “With signs that pension fraud is on the increase, the Chancellor believes that introducing hard-hitting changes – to stop scams before they occur – is more important than ever.”
The Government will consult on the proposals before the end of the year and the next steps will be announced in the Budget.