The pensions regulator is calling on the pensions industry to publicly pledge to combat pension scams as part of a major new campaign
Pension providers, trustees and administrators are urged to help protect savers thinking of cashing in their pensions by ensuring they can spot the warning signs of a scam and are informed of any risks when they look to make a transfer.
Those working in the industry will also be challenged to educate themselves about current and emerging scam tactics and adopt best practice when it comes to transfer due diligence.
The Pensions Regulator (TPR) has launched an online interactive training module outlining the processes it expects all trustees and providers to follow to keep savers safe.
More than £30m has been reportedly lost to pension scammers since 2017, according to complaints filed with Action Fraud, with reported losses ranging from under £1,000 to as much as £500,000 per saver. While the average victims are men in their fifties, evidence shows they can happen to anyone.
However, TPR says the true scale is likely to be much higher as savers often fail to spot the signs of a scam and do not know how much is in their pots.
Nicola Parish, executive director of frontline regulation at TPR, said: ‘Pension scams devastate lives. As the first line of defence for savers, trustees and pension providers have a vital role to play in beating the people behind these despicable crimes.
‘Scammers are targeting pension pots big and small and so I call on the industry to do its bit and make the pledge to help prevent people losing a lifetime of savings.’
The campaign, which is supported by the Pension Scams Industry Group (PSIG), requires those that make the pledge to agree a number of actions.
These are to regularly warn members of the risk of scams; encourage those requesting cash drawdown to call the Pensions Advisory Service for free, impartial guidance; learn the warning signs of a scam and best practice for transfers; take appropriate due diligence measures and document pension transfer procedures; clearly communicate concerns to members if high-risk transfers must be made; and to report concerns about a scam to the authorities and communicate this to the scheme member.
Trustees, advisers and providers can sign up to the pledge through the TPR website. Pledgers can also self-certify they have met the six pledge steps.
Separately, the Department for Work and Pensions has laid out ‘stronger nudge’ guidance, requiring the trustees of occupational pension schemes to steer members towards taking Pension Wise guidance when they seek to access their pension, also with the aim of reducing the risk of scams.
The Pension Wise service provides free, impartial guidance to help over 50s with an occupational pension understand the options available to them for accessing their pension pots.
Guy Opperman, minister for pensions and financial inclusion, said: ‘With the new measures in the Pension Schemes Bill and this co-ordinated approach, I am confident that we can stop the callous crooks who rob people of their retirement savings.
‘I would encourage all pension providers, trustees and administrators to pledge their commitment to this campaign and help do their bit to crack down on pension scams.’