New rules are on the way to stop pension scammers preying on retirement savers seeking to switch their money into a SIPP or QROPS.
The measures lined up by the UK government include:
- A ban on cold-calling that covers emails and texts as well as direct contact
- Tougher rules to stop scammers opening fraudulent pensions
- New rules to block cash transfers to fraudulent pensions
The latest official data revealed scammers currently net around £1 million a month with their bogus schemes.
The government calculates £43 million has been illegally transferred from pension funds to scammers since April 2014, with an average loss of £15,000.
Economic Secretary to the Treasury Stephen Barclay said: “It’s utterly unacceptable that people who have worked all their lives to build up a pension pot should be subject to scams which may leave them out of pocket.”
The scale of losses would suggest the scammers pick retirement savers with pots of less than £30,000 as targets.
Pension transfers of less than this level do not have to take independent advice before switching schemes.
Minister for Pensions and Financial Inclusion Guy Opperman said: “The figures highlight the extent to which people’s savings are being targeted and stolen through elaborate hoaxes – leaving them with little opportunity to build up their savings again. That is why we are introducing tough new measures for those who scam.
Block on scammers
“If people have saved for a private pension, we want to protect them. This is the biggest lifesaving that individuals normally make over many years of hard work. By tackling these scammers, people should know that cold calling, apart from exceptional circumstances, is banned.”
The minister also released more details about plans to block pension transfers.
He explained only active companies with up-to-date accounts will have the right to set up a pension scheme.
” Limiting transfers of pension pots from one occupational scheme to another will mean trustees must check their receiving scheme is regulated by the Financial Conduct Authority, or has an active employment link with the individual, or is an authorised master trust,” said Opperman.