Pension savings protected from scammers as new rules become law TODAY
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The regulations mean suspicious transfers can be stopped from ending up in the grubby clutches of a fraudster.
Pension trustees and scheme managers will also get new powers to intervene.
Minister for Pensions Guy Opperman said: “We are tackling the scourge of pension scams in practical terms to safeguard pensioners’ hard-earned savings.
“These measures will provide better protection for savers.”
The measures, which come into force on November 30, mean pensioners’ requests to move their money would be tagged with a red or amber flag to block them if thought suspicious.
Requests could be stopped if savers have had an unsolicited approach to access or transfer their savings over social media.
Such contact would trigger a flag, which would mean pension trustees or scheme managers could block it until more is known.
Helen Morrissey, Senior Pensions and Retirement Analyst at Hargreaves Lansdown, said: “Scammers rob people of their hard-earned retirement savings and for too long schemes have been powerless to stop them. These measures are a welcome step forward in protecting scheme members by giving schemes the power to stop transfers or refer members for guidance if they have any suspicions.
Pensions Ombudsman, Anthony Arter, said: “Having witnessed the real damage that pension scams can inflict on an individual’s retirement I welcome the new transfer regulations which look to make transfers safer. I am optimistic that over time statutory clarity regarding the level of due diligence expected of trustees and additional information and guidance to be given where appropriate to those planning to transfer, will help combat pension scams, and also reduce the number of transfer complaints to The Pensions Ombudsman.
“Complaints received after the regulations come into effect, will be investigated within the framework of those regulations (and industry guidance) on a case by case basis, having regard to the facts and evidence in each case”.
The Government has committed to reviewing the new regulations within 18 months to ensure they remain as effective as possible in targeting the evolving methods used by scammers.
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Nicola Parish of the Pensions Regulator (TPR), said: “We welcome these new regulations which further empower trustees to act as the first line of defence against scammers.
“We are pleased these new rules enshrine in legislation two of the key parts of the pledge to combat pension scams – around due diligence measures and issuing members warnings of high-risk transfers.
“We urge all trustees and pension providers to take note of these new rules and continue to play their part in stopping scams. This includes reporting all suspected scams to Action Fraud, or by calling 101 in Scotland.
“The pension industry can continue to demonstrate its commitment to stopping the scourge of scammers by joining our pledge campaign.”
Comment by Pensions Minister Guy Opperman
Pension scammers are the lowest of the low.
They lure in unsuspecting victims and then fleece them of their hard-earned savings, leaving lives ruined and retirement plans in tatters.
That’s why today, we’re taking further steps to safeguard savers and bolster pension trustees’ powers in the fight against fraud.
These new measures will empower trustees to intervene when they suspect a pension transfer will end up in a fraudster’s grubby fingers.
Trustees will be able to “red flag” transfers when they spot hallmarks of a scam operation, putting a halt to a saver unwittingly handing over their financial future.
As Minister for Pensions, one of my key priorities is helping make sure people are protected from the devastating impact of scams.
And this is a real joint-effort, involving collaboration across industry, regulators and law enforcement.
We’re working together to crack down on these criminals, knowing that as their crooked techniques evolve, so must our defences.
Savers can also be on the front foot themselves – knowing what to look out for and the techniques frequently deployed by scammers is the perfect place to start.
So I urge readers – don’t only educate yourselves, speak to your loved ones and make them aware of the risks as well.
And know that support is out there, including via our MoneyHelper service and from Action Fraud.
Together, we can stop scammers in their tracks and ensure everyone gets to enjoy the best retirement possible.
- Guy Opperman is a Pensions Minister
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