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At the start of Pension Awareness Week, the Pensions Management Institute has warned there must be no let-up in vigilance as more than £26.4m in pensions money was recently taken by scammers.
Pension savers have lost about £26.4m to scammers between 2020 and 2022, figures from the City of London Police’s National Fraud Intelligence Bureau show, obtained by the PMI through a freedom of information request.
As part of Pension Awareness Week starting on Monday, the PMI is calling on pension scheme trustees and members to remain alert to potential scams, fearing that the cost-of-living crisis could lead more members to want to access their pension savings early, leaving them vulnerable to scams.
There were 1,595 pension scams in England and Wales between 2020 and 2022, which includes only those that have been reported to date. On average, each saver lost about £16,500.
“These statistics show that in spite of the best efforts of those managing our pension schemes, the scourge of scams continues to ruin the lives of so many people. The sheer scale of pension scams – in terms of both the number of cases and the amount of money involved – is truly horrifying,” said PMI president Robert Wakefield.
He said it was “sobering” to see that so many have been prepared to access pension savings before age 55 through pension liberation, at the cost of longer-term security.
“Tragically, it is also very clear that in spite of tight regulatory constraints, scammers remain able to deceive members in order to steal their accrued pension savings. The clear lesson for us all is that extreme vigilance remains essential. This problem will never go away, but we must redouble our efforts to keep it to a minimum,” he added.
The cases reported to police during the pandemic years included 400 scams, 1,185 cases of pension liberation fraud and 10 cases of pension fraud by pensioners or their estate.
Cold-calling about pensions became illegal on 9 January 2019, but the rules do not apply to other communication channels.
As scams remain a problem, trustee powers were strengthened at the end of November 2021 in relation to pension scams, so that they can now block a pension transfer if it does not fulfil certain requirements and thereby raises a ‘red flag’. The transfer rules also allow trustees to pause a transfer that raises an amber flag and require the transferring member to receive guidance from MoneyHelper, the government-backed guidance service.
Have you noticed an uptick in amber or red flags for transfer requests?