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Hundreds of pension savers quizzed over transfer requests

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16/03/2022
Hundreds of pension savers have been interviewed before their pension transfer could go ahead, figures have revealed.

Anti-scam rules were introduced at the end of November 2021 requiring schemes to carry out ‘Pensions Safeguarding guidance’ interviews.

This enables them to check pension transfers after first noticing an ‘amber’ or ‘red’ flag which indicates the potential for scams.

Risk factors could include:

  • high risk or unregulated investments included in the receiving scheme
  • where the fees being charged by the receiving scheme are unclear or high
  • the proposed investment structures are complicated or unorthodox
  • the receiving scheme includes overseas investments or any of the advisers are based overseas
  • there has been a high volume of transfers to a single receiving scheme or involving a single adviser or firm.

An information request to the Money and Pension Service by pension consultancy firm LCP revealed that since the new rule, of 792 contacts to date, 488 have resulted in completed interviews. A further 178 interviews are in the pipeline.

Over 100 didn’t result in an interview because they were cancelled , the member didn’t show up or they couldn’t be completed for some reason.

Senior consultant, Daniel Jacobson, LCP’s lead on pension scams, said: “It is early days for the new regime but it is clear that hundreds of people have already been required to take part in an anti-scam interview before their pension transfer could go ahead.  At this stage we do not know whether there was an actual risk of a scam in many – or indeed any – of these cases, or whether providers are simply routinely referring a large proportion of potential transfers for guidance, rather than carrying out the expected due diligence under the new transfer regulations.

“We also do not yet have data on whether the member simply ‘ticked the box’ by taking part in an interview but then carried on with the planned transfer regardless.  It is very important that DWP and the Money and Pensions Service undertake research into what sorts of cases are being referred, what happens during these conversations and how consumer behaviour is being altered as a result. Only then can we say for sure whether these new measures are genuinely protecting consumers.”

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