Protecting pension savers – five years on from the pension freedoms: Pension scams

Work and Pensions Committee Closed Inquiry
Opened: 28 Jul 2020 Closed: 2 Feb 2022 Parliament page
This inquiry looked at how savers are prepared and protected to move from saving for retirement to using their pension savings. This work will be in three parts. First, we’re looking at pension scams and what more can be done to prevent them. We are interested in finding out: How … Read more
29 Recommendations
8 Conclusions
1 Report
5 Oral sessions
6 Letters
5 Events
Activity timeline 18 events
16 Jul
2021
Correspondence
6 Jul
2021
Report published
11 Jun
2021
Correspondence
28 Mar
2021
Report published
26 Feb
2021
Correspondence
27 Jan
2021
Oral evidence
27 Jan
2021
Formal meeting (oral evidence session) · Virtual meeting
20 Jan
2021
Correspondence
6 Jan
2021
Oral evidence
6 Jan
2021
Formal meeting (oral evidence session) · Virtual meeting
2 Dec
2020
Oral evidence
2 Dec
2020
Formal meeting (oral evidence session) · Room 5, Palace of Westminster
Oral evidence sessions 5 sessions
27 Jan 2021
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Protecting pension savers – five years on from the pension freedoms: Pension scams
Emma Varley · Department for Work and Pensions Guy Opperman MP · Department for Work and Pensions Pete Searle · Department for Work and Pensions
6 Jan 2021
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Protecting pension savers – five years on from the pension freedoms: Pension scams
Commander Clinton Blackburn · City of London Police Graeme Biggar · National Economic Crime Centre Mark Steward · Financial Conduct Authority Nicola Parish · The Pensions Regulator
2 Dec 2020
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Work and Pensions Committee
Dennis Waite Neil Postins · National Economic Crime Victim Care Unit Pauline Smith · Action Fraud Rick Muir · The Police Foundation Sue Flood
7 Oct 2020
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Work and Pensions Committee meeting
Brian Thorne · Pensions Management Institute David Weeks · Association of Member Nominated Trustees Julian Adams · M and G PLC Lorraine Harper · Mercer Neil Copeland · Dalriada Trustees Limited Nita Tinn · Association of Professional Pension Trustees Peter Hazelwood · Aviva Rachel Vahey · AJ Bell
16 Sep 2020
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Work and Pensions Committee meeting
Andy Agathangelou · Transparency Task Force Margaret Snowdon · Pension Scams Industry Group (PSIG) Richard Piggin · Which? Tim Fassam · Personal Investment Management and Financial Advice Association (PIMFA)
Title HC No. Published Items Response
Fifth report: Protecting pension savers—five years on from the p… HC 648 28 Mar 2021 37 Responded
Recommendations & Conclusions
37 results
1 Conclusion
Fifth report: Protecting pension s…
People save for retirement and later life in many different ways, not solely through their...
People save for retirement and later life in many different ways, not solely through their pensions. During the course of our inquiry we have been contacted by a number of people who have lost savings, other than pensions, which were … Read more
Government Response
The Department for Work and Pensions (DWP) and HM Treasury already work collaboratively on these issues, including through Project Bloom, and recognise the importance of doing so to address the … Read more
Department for Work and Pensions
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2 Conclusion
Fifth report: Protecting pension s…
The pension freedoms gave people more choice in how they use their money to meet...
The pension freedoms gave people more choice in how they use their money to meet their own needs. However, by offering pension savers access to a much wider range of investments, the freedoms also removed much of the distinction between … Read more
Government Response
Both the Government and Project Bloom members recognise the difficulty in determining the scale of pension scams and the barrier this creates in effectively tackling the problem. We accept the … Read more
Department for Work and Pensions
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3 Recommendation
Fifth report: Protecting pension s…
We recommend that DWP should publish details of its plans to co-ordinate work with the...
We recommend that DWP should publish details of its plans to co-ordinate work with the Treasury to combat pension scams as a matter of urgency. Following the introduction of the pension freedoms there is now less practical distinction between the … Read more
Department for Work and Pensions
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4 Conclusion
Fifth report: Protecting pension s…
The real scale of pension scamming is undoubtedly much larger than the £30 million reported...
The real scale of pension scamming is undoubtedly much larger than the £30 million reported to Action Fraud, the UK’s national reporting centre for fraud and cybercrime, between 2017 and August 2020. We have even heard examples of individual cases … Read more
Government Response
The City of London Police (CoLP) are the National Lead Force for fraud, and responsible for the delivery of the Action Fraud Service. They are an active member of Project … Read more
Department for Work and Pensions
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5 Recommendation
Fifth report: Protecting pension s…
We recommend that Project Bloom, the multi-agency taskforce set up to tackle pension scams, should...
We recommend that Project Bloom, the multi-agency taskforce set up to tackle pension scams, should develop a range of measures to enable a better understanding of the scale of pension scamming, rather than relying solely on the current Action Fraud … Read more
Department for Work and Pensions
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6 Recommendation
Fifth report: Protecting pension s…
At present there is no universal definition of pension scams and the range of potential...
At present there is no universal definition of pension scams and the range of potential activity which could be classed as a scam runs from sharp practice all the way to outright fraud. Project Bloom, the multi-agency taskforce set up … Read more
Department for Work and Pensions
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7 Recommendation
Fifth report: Protecting pension s…
Many victims of pension scams never report that they have been scammed.
Many victims of pension scams never report that they have been scammed. Others report a long time after it has taken place. Scam victims reasonably expect that, when they make a report to Action Fraud, it will be acted upon. … Read more
Department for Work and Pensions
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8 Recommendation
Fifth report: Protecting pension s…
The aftermath of a pension scam can leave a victim needing to deal with several...
The aftermath of a pension scam can leave a victim needing to deal with several different bodies without much guidance or support. For many victims Action Fraud is the first point of contact and for those for whom it is … Read more
Department for Work and Pensions
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9 Recommendation
Fifth report: Protecting pension s…
We heard repeatedly about a worrying trend of secondary scammers—scammers targeting people who have already...
We heard repeatedly about a worrying trend of secondary scammers—scammers targeting people who have already been the victim of a pension scam. People who have not reported their case to an appropriate body—or who have done so but not received … Read more
Department for Work and Pensions
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10 Recommendation
Fifth report: Protecting pension s…
Pension firms can and should report suspect scams directly to Action Fraud.
Pension firms can and should report suspect scams directly to Action Fraud. But we heard extensive evidence from the pensions industry that they are not sure where or how to report pension scams or suspected scams and that they are … Read more
Department for Work and Pensions
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11 Conclusion
Fifth report: Protecting pension s…
The pensions industry does not universally share information about possible scams amongst providers and schemes.
The pensions industry does not universally share information about possible scams amongst providers and schemes. Information can be, and is, shared voluntarily, including through the Pension Scams Industry Group and the forum it supports— the Pension Scams Industry Forum. WWee … Read more
Government Response
The Government agrees with this recommendation and it fits within the plans of the Department for Work and Pensions (DWP) to review the policy. Scams are ever evolving and DWP … Read more
Department for Work and Pensions
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12 Recommendation
Fifth report: Protecting pension s…
We welcome the fact that the Pensions Regulator is supporting efforts to encourage the pensions...
We welcome the fact that the Pensions Regulator is supporting efforts to encourage the pensions industry to share information about pension scams through its pledge to combat pension scams campaign, which was launched in November 2020. We would like to … Read more
Department for Work and Pensions
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13 Recommendation
Fifth report: Protecting pension s…
Pension scammers do not confine themselves to the borders of the UK.
Pension scammers do not confine themselves to the borders of the UK. Many of the cases we heard about took place across several countries, making enforcement more complicated. We note that since the introduction of a potential 25% charge on … Read more
Department for Work and Pensions
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14 Recommendation
Fifth report: Protecting pension s…
The Pension Schemes Act 2021 will allow people’s statutory right to transfer from their pension...
The Pension Schemes Act 2021 will allow people’s statutory right to transfer from their pension scheme to be restricted where there are signs of a pension scam. Regulations will be developed by DWP and are expected to be in place … Read more
Department for Work and Pensions
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15 Recommendation
Fifth report: Protecting pension s…
The regulations will identify potential indicators of a pension scam which would raise either red...
The regulations will identify potential indicators of a pension scam which would raise either red or amber flags. A red flag would allow a transfer to be blocked and an amber flag would allow a transfer to be paused until … Read more
Department for Work and Pensions
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16 Recommendation
Fifth report: Protecting pension s…
The FCA hosts a warning list on its website.
The FCA hosts a warning list on its website. The warning list publishes details of unregulated entities which appear to be carrying out an FCA regulated activity without the requisite authorisation or permission. The Minister for Pensions and Financial Inclusion … Read more
Department for Work and Pensions
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17 Recommendation
Fifth report: Protecting pension s…
The move online by pension scammers has been a recurring theme of our inquiry.
The move online by pension scammers has been a recurring theme of our inquiry. Regulators appear powerless to hold online firms to account for hosting scam advertisements in the same way they would be able to for traditional media. Scammers … Read more
Department for Work and Pensions
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18 Recommendation
Fifth report: Protecting pension s…
On 15 December 2020 the Government announced its decision to bring forward legislation for the...
On 15 December 2020 the Government announced its decision to bring forward legislation for the Online Safety Bill but also signalled its intent to exclude financial harms from the scope of that legislation. It is notable that several public bodies, … Read more
Department for Work and Pensions
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19 Recommendation
Fifth report: Protecting pension s…
In the period between now and any legislation coming into force, we recommend that voluntary...
In the period between now and any legislation coming into force, we recommend that voluntary codes of conduct should be developed by search engines and social networks which make it clear that a request from a UK-based regulator is sufficient … Read more
Department for Work and Pensions
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20 Recommendation
Fifth report: Protecting pension s…
Since 2014, the FCA and the Pensions Regulator have been running ScamSmart campaigns to alert...
Since 2014, the FCA and the Pensions Regulator have been running ScamSmart campaigns to alert people to the risks of scams. The campaigns have made effective use of limited resources to target groups vulnerable to scams. We recommend that Pensions … Read more
Department for Work and Pensions
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21 Conclusion
Fifth report: Protecting pension s…
When someone is looking for support to help them make a decision about their pension...
When someone is looking for support to help them make a decision about their pension they can seek either advice or guidance. These are both important tools to prevent scams, with earlier intervention likely to lead to better outcomes. Advice … Read more
Government Response
The Government and Project Bloom members agree that a publicly available description of its members and their respective roles and responsibilities would be a beneficial next step, and this is … Read more
Department for Work and Pensions
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22 Recommendation
Fifth report: Protecting pension s…
When the pension freedoms were introduced, a guidance guarantee was presented as a key pillar...
When the pension freedoms were introduced, a guidance guarantee was presented as a key pillar of the reforms supporting people making use of the new range of choices available to them. Everyone with a defined contribution pension is entitled to … Read more
Department for Work and Pensions
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23 Recommendation
Fifth report: Protecting pension s…
We recommend that the Department for Work and Pensions should consider the options available for...
We recommend that the Department for Work and Pensions should consider the options available for the Money and Pensions Service to offer enhanced guidance or limited advice, including through technological solutions. Regulated advice comes at a cost to savers, which … Read more
Department for Work and Pensions
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24 Recommendation
Fifth report: Protecting pension s…
The pension advice allowance allows members of defined contribution and hybrid pension schemes to withdraw...
The pension advice allowance allows members of defined contribution and hybrid pension schemes to withdraw £500 from their pension up to three times in different tax years for advice. There appears to have been little take up of the Pension … Read more
Department for Work and Pensions
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25 Recommendation
Fifth report: Protecting pension s…
There are many bodies with potentially overlapping enforcement responsibilities relating to pension scams.
There are many bodies with potentially overlapping enforcement responsibilities relating to pension scams. These include, but are not necessarily limited to: the Pensions Regulator, the FCA, the Insolvency Service, HMRC, Information Commissioner’s Office, the police service, the Serious Fraud Office, … Read more
Department for Work and Pensions
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26 Recommendation
Fifth report: Protecting pension s…
The FCA told us that there have been a very large number of prosecutions involving...
The FCA told us that there have been a very large number of prosecutions involving scams and unauthorised business. We do not agree with this assessment. Its own figures—revealed only through Freedom of Information requests—show that there were just 25 … Read more
Department for Work and Pensions
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27 Conclusion
Fifth report: Protecting pension s…
We have heard devastating evidence from pension scam victims who were persuaded to hand their...
We have heard devastating evidence from pension scam victims who were persuaded to hand their savings over to a scammer because the scam pension scheme was registered with HMRC. We welcome the action that has led to a reduction in … Read more
Government Response
Her Majesty’s Revenue & Customs (HMRC) aims to treat all of its customers with empathy and respect. This includes tailoring its approach to individual customer needs where additional support is … Read more
Department for Work and Pensions
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28 Recommendation
Fifth report: Protecting pension s…
Regulators exist to protect savers and not enable scammers.
Regulators exist to protect savers and not enable scammers. Where a regulator has failed in this fundamental duty they should be held accountable. We recommend that the Government review the recourse available to pension scam victims when the actions of … Read more
Department for Work and Pensions
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29 Conclusion
Fifth report: Protecting pension s…
The pensions and wider financial services industry has a strong reputational interest in preventing scams.
The pensions and wider financial services industry has a strong reputational interest in preventing scams. The regulators responsible for protecting the reputations and consumers of these industries are largely levy funded to meet this interest. Levy payers, particularly those regulated … Read more
Government Response
The Pensions Regulator (TPR) is working to ensure its processes thoroughly assess the value for money that independent trustees (ITs) provide. This includes comparing the amount recovered with the costs … Read more
Department for Work and Pensions
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30 Conclusion
Fifth report: Protecting pension s…
Project Bloom is a multi-agency task force set up to tackle pension fraud in 2012.
Project Bloom is a multi-agency task force set up to tackle pension fraud in 2012. It is not a statutory body and receives no dedicated funding. The members of Project Bloom have argued convincingly to us that it has the … Read more
Government Response
It is unlikely to be in a member’s best interest to transfer out of a scheme before attempts to recover assets have been concluded. Savers who left the scheme early … Read more
Department for Work and Pensions
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31 Recommendation
Fifth report: Protecting pension s…
The establishment in 2012 of Project Bloom, the multi-agency task force set up to tackle...
The establishment in 2012 of Project Bloom, the multi-agency task force set up to tackle pension fraud was an attempt to overcome this. We support the creation of Project Bloom, but it has become clear that it does not have … Read more
Department for Work and Pensions
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32 Recommendation
Fifth report: Protecting pension s…
As well as ruining someone’s financial future, a pension scam can leave them with large...
As well as ruining someone’s financial future, a pension scam can leave them with large unexpected tax bills. Pension liberation scams often involve scammers claiming that there are legal loopholes, such as loans or cash incentives, which can allow a … Read more
Department for Work and Pensions
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33 Recommendation
Fifth report: Protecting pension s…
HMRC has been described as “unrelenting and uncompromising” in the pursuit of unauthorised payment charges.
HMRC has been described as “unrelenting and uncompromising” in the pursuit of unauthorised payment charges. While the position taken by HMRC is legally correct, it has often lacked empathy or understanding of impact that its demands have on victims. We … Read more
Department for Work and Pensions
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34 Recommendation
Fifth report: Protecting pension s…
We recommend that HMRC should re-join the pension scams taskforce Project Bloom.
We recommend that HMRC should re-join the pension scams taskforce Project Bloom. It was a founding member when Project Bloom was set up in 2012 but has since left. The Minister for Pensions and Financial Inclusion told us that he … Read more
Department for Work and Pensions
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35 Recommendation
Fifth report: Protecting pension s…
Where a pension scheme has been used as a vehicle for a pension liberation scam...
Where a pension scheme has been used as a vehicle for a pension liberation scam the Pensions Regulator will appoint an independent trustee. The trustees management fees and associated legal costs will be met directly from the scheme’s assets, which … Read more
Department for Work and Pensions
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36 Recommendation
Fifth report: Protecting pension s…
Members of schemes where professional trustees are appointed can face long waits to receive any...
Members of schemes where professional trustees are appointed can face long waits to receive any recovered assets, even if a significant proportion of the assets are recovered. Often because of the costs associated with providing communications to members, which are … Read more
Department for Work and Pensions
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37 Recommendation
Fifth report: Protecting pension s…
Being a victim of any fraud can be devastating.
Being a victim of any fraud can be devastating. Pension scams often involve the loss of a lifetime’s savings and many of the plans people have made for their later life. Victims of pension scams suffer lifelong financial harm and … Read more
Department for Work and Pensions
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Correspondence 6 letters
16 Jul 2021 Correspondence from Google to Chair (Financial advertising and preventing scams)
Parliament page
11 Jun 2021 Correspondence with the City of London Police about pension scams
Parliament page
26 Feb 2021 To committee Letter from Parliamentary Briefings Manager, Office of the City Remembracer about Pension scams
Parliament page
20 Jan 2021 Correspondance with the Economic Secretary to the Treasury on pension scams, dated 14 January
Parliament page
4 Nov 2020 Correspondence between the Chair and Minister for Pensions and Financial Inclusion about Clause 125 of the Pension Schemes Bill
Parliament page
7 Oct 2020 Correspondence from the Minister for Pensions and the FCA about Clause 125 of the Pension Schemes Bill
Parliament page