New scam-fighting plan for pensions
TPR is warning that savers may be lured by offers to access their pension savings early to cover essential household bills or be attracted by fake investments offering high returns that never materialise.
In its latest plan to tackle scams, the regulator said it will continue to improve the co-ordination of intelligence between scam-fighting partners to better disrupt and prevent fraud and scams and bring scammers to justice.
The strategy follows a joint assessment of the threat from pensions scams carried out by TPR and the National Fraud Intelligence Bureau.
Nicola Parish, TPR’s executive director of frontline regulation, said: “Our new scams combat plan sets out to make savers aware of the risk of scams, encourage schemes to adopt higher standards of protection for savers’ pots and secure the intelligence we need to work with others to pursue and punish criminals.
“But this task is not ours alone. We expect industry to lead the way in thinking of innovative ways to protect savers now and in the future.”
TPR’s plan will complement the work of Project Bloom, the multi-agency taskforce created in 2012 to tackle pension scams, which is to be renamed as the Pension Scams Action Group.
The name change follows a recommendation by the Work and Pensions Committee and is designed to make the group’s scam-busting remit clearer to the public.
TPR’s three-pronged plan aims to: educate industry and savers on the threat of scams, prevent practices which can harm savers’ retirement outcomes, and fight fraud through the prevention, disruption and punishment of criminals.
Tom Selby, head of retirement policy at AJ Bell, said: “The last two years have already been incredibly difficult for millions of people, with Coronavirus and lockdowns taking a massive toll on people’s physical and mental wellbeing, including their financial health in some cases. On top of this, the cost-of-living is rising rapidly, with the energy price cap set to surge yet again later this year.
“All of this means millions of Brits face being on or near the financial precipice in 2022. Depressingly, this is a perfect environment for scammers to thrive.
“Unscrupulous fraudsters will attempt to take advantage of vulnerability through any means possible, from offering ‘early access’ to pensions to pushing dodgy investments promising sky-high, guaranteed returns.
“Offers such as these might be particularly tempting to people experiencing inflation on the brink of double-digits. However, the reality is that, unless you are in serious ill-health, accessing your pension early will lead to a huge tax penalty from HMRC, while being lured by the promise of sky-high investment returns from a scammer could see you lose everything.
“Regulators are right to get on the front foot on this and the vast majority of the pensions industry stands ready to help educate customers about the risks.
“It is particularly positive TPR is taking steps to improve intelligence sharing and testing new scam prevention solutions. It is vital firms share any concerns they have about schemes, firms or individuals with the relevant authorities, and vice versa, to ensure as many savers as possible are protected.”