The UK Government has announced new measures to combat pension scams, which it describes as "one of the most damaging forms of financial fraud." The Department for Work and Pensions (DWP) is proposing changes that would automatically block pension transfers where there is no clear link between the saver and the Small Self-Administered Scheme (SSAS) they are transferring to.
Criminals often trick savers into transferring their retirement funds into deceptive schemes, leaving victims unable to recover their money. The new proposals aim to make it harder for fraudsters to access people's savings.
Minister Warns of 'Warning Signs Flashing Red'
Torsten Bell MP, Minister for Pensions, said: "Pension scams can rip away not just people’s savings, but the retirement they are looking forward to. This Government is determined to stay one step ahead of criminals who seek to exploit savers." He added: "Too often we see fraudsters trying to trick workers into transferring their savings into bogus pensions. We are stepping in to automatically block transfers where the warning signs are flashing red."
Consultation and Collaboration
The DWP said that Tuesday’s (June 9) consultation was the first step in a wider Government programme to tackle pension fraud. The Pension Scams Action Group (PSAG) is working alongside the Government, with further measures, including potential new laws, being developed this year.
Gaucho Rasmussen, Executive Director of Enforcement & Executive General Counsel at The Pensions Regulator (TPR), on behalf of PSAG, said: "Fraud wrecks lives – and tackling it demands strong, coordinated action. Through the Pension Scams Action Group, which TPR leads, we are working closely with the DWP, law enforcement, the pensions industry and other partners to identify emerging threats and stop fraudsters in their tracks."
Rasmussen added: "The targeted safeguard proposed is an important step forward in protecting savers. We urge trustees and administrators to have their say."
