The Government has launched a consultation aimed at tackling pension scams. A cross-Government taskforce led by the Pensions Regulator and comprising of Government, regulators and law enforcement agencies has been in place for some time to tackle the growing problem of pension scams. It was set up to monitor trends, share intelligence on emerging threats, and help co-ordinate action. But it has become increasingly clear that more direct intervention is necessary to curb the threat of pension scams in the UK.
This is demonstrated by these research statistics:
- Research by the Money Advice Service suggests that there could be as many as eight scam calls every second – the equivalent of 250 million calls per year. Citizens Advice have calculated that 10.9 million consumers have received unsolicited contact about their pension since April 2015;
- There were 30,000 ‘Defined Contribution’ scheme transfers in 2015/16, representing £1 billion of assets. Industry estimates suggest that fraudsters could be behind as many as one in 10 pension transfer requests; and
- Individuals reported nearly £19 million in suspected pension liberation fraud between April 2015 and March 2016 – twice as much as for the same period in 2014-15.
The Government is making three proposals:
- Ban cold calling – this would be done through primary legislation and publicising it as widely as possible to the public.
- Restricting a pension scheme member’s statutory right to a transfer so that it would only apply where:
- The receiving scheme is a personal pension scheme operated by an FCA-authorised firm or entity;
- A genuine employment link to the receiving occupational pension scheme could be demonstrated, with evidence of regular earnings from that employment and confirmation that the employer has agreed to participate in the receiving scheme; or
- The receiving occupational pension scheme was an authorised master trust.
- Making it harder to open fraudulent schemes – the main idea here being that only active companies would be able to be used for scheme registrations.
This consultation runs until 13 February 2017.
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