To ask the Secretary of State for Work and Pensions, with reference to the finding of the Financial Conduct Authority that pension scammers take on average £91,000 from each of their victims, what assessment her Department has made of additional protections required to protect UK pensioners (a) in the UK and (b) overseas from pension transfer scams.
Action was taken by the Pension Regulator, Financial Conduct Authority, and Money Advice and Pension Service on 7 April pointing to the actions members should seek to take to safeguard against becoming victims of scams. Additional guidance was issued to trustees, and providers from both The Financial Conduct Authority and the Pensions Regulator to support them to produce suitable communications during the Covid-19 outbreak.
Please see links below for more information about the joint statement from Regulators and the Money Advice Service, and help available, produced by the Pension Protection Fund and supported by government.
All of Government is committed to safeguarding consumer savings amongst those based in the UK and living overseas with UK based pension savings. We have adopted a layered approach building from interventions to assist all pension savers seeking to access their pensions to those who are most at risk of scams.
For all pension savers aged 50 and over, in the lead up to accessing their pension savings, our aim is to support them make informed choices about their retirement income. We are therefore committed to replicating measures introduced by the FCA for contract based schemes for occupational pension schemes and requiring trustees to provide information to pensions savers from the age of 50, in a simpler format, to encourage savers to think about their retirement savings, choices and raise awareness of Pension Wise.
We want to encourage savers with to take appropriate guidance (currently provided by MAPS under the Pension Wise brand) when they exercise their Pension Freedoms by applying to access savings. Recent trials showed a nudge to guidance during the application process is effective. We want to present taking guidance as a natural part of the journey when individuals access their pension savings. We are working with the FCA on rules that would require managers of private pension schemes to Introduce parallel provisions.
Although the majority of transfers are to safe destinations there are still fraudsters who try to entice individuals to transfer to schemes for the purposes of relieving them of their pension savings.
To help protect people from pension scams, government has introduced an amendment to clause 125 in the Pension Schemes Bill 2020 limiting the statutory right to transfer The clause achieves two things:
In addition, the Government, working with the regulators and the Money and Pension Service, has been communicating with pension savers to alert them to the risk of scams in the current climate. DWP continues to communicate regularly on social media about the warning signs of a scam.