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
32 Recommendations
5 Conclusions
1 Report
5 Oral sessions
6 Letters
5 Events
Activity timeline 13 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
20 Jan
2021
Correspondence
6 Jan
2021
Oral evidence
2 Dec
2020
Oral evidence
4 Nov
2020
Correspondence
7 Oct
2020
Oral evidence
7 Oct
2020
Correspondence
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
29 results
Clear
3 Recommendation Not Addressed
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
Government Response
The government response discusses Project Bloom's definition of pension scams and ongoing threat assessments, but it does not address the recommendation for DWP to publish plans for co-ordination with the Treasury.
Department for Work and Pensions
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4 Conclusion Not Addressed
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 government response describes existing governance and monitoring processes for Action Fraud by the City of London Police, and states that additional reporting to Parliament is unnecessary. It does not directly engage with the committee's observation about the real scale of pension scamming being much larger than reported.
Department for Work and Pensions
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5 Recommendation Not Addressed
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
Government Response
The government's response focused on Action Fraud's role in victim support and referrals, and why it cannot expand its administrative function, completely failing to address the recommendation for Project Bloom to develop new measures for understanding the overall scale of pension scamming.
Department for Work and Pensions
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6 Recommendation Not Addressed
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
Government Response
The government response discusses increasing awareness of secondary scammers through various campaigns and services, but does not address the recommendation for Project Bloom to continue using the Pension Scams Industry Group's definition of pension scams.
Department for Work and Pensions
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7 Recommendation Not Addressed
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
Government Response
The government emphasizes the importance of reporting to Action Fraud and outlines efforts to improve industry reporting and communications. However, it does not commit to Action Fraud being accountable to Project Bloom or to the City of London Police making annual reports to Parliament on efforts to repair Action Fraud's reputation.
Department for Work and Pensions
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9 Recommendation Not Addressed
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
Government Response
The government response details the Pensions Regulator's industry-focused Pledge campaign, which encourages organisations to combat scams and adopt a code of good practice, but does not address the recommendation to use the ScamSmart campaign to warn consumers about secondary scammers.
Department for Work and Pensions
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10 Recommendation Not Addressed
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
Government Response
The government response confirms that Money and Pensions Service (MaPS) services, including Pension Wise, are available to expatriates and encourages them to use these resources. It does not address the recommendation for Action Fraud and Project Bloom to provide clear guidance and tools for the pensions industry to report suspected scam activity.
Department for Work and Pensions
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13 Recommendation Not Addressed
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
Government Response
The government response details the powers within the Pension Schemes Act 2021 and DWP's system of red and amber flags for pension transfers to prevent scams. It does not address the recommendation for the Money and Pensions Service to run a programme encouraging expatriates to access its free guidance.
Department for Work and Pensions
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14 Recommendation Not Addressed
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
Government Response
The government response outlines its position on online platform operators' responsibility for financial promotions and the FCA's actions to address online fraud, but does not address the recommendation to publish a review of pension transfer legislation within 18 months of regulations becoming operational.
Department for Work and Pensions
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15 Recommendation Not Addressed
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
Government Response
The government response details the inclusion of online fraud in the Online Safety Bill and DCMS's work on regulating online advertising. It does not address the recommendation for regular reviews of the suitability of red and amber flags for pension transfers.
Department for Work and Pensions
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16 Recommendation Not Addressed
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
Government Response
The government response outlines ongoing work with the tech sector to explore voluntary approaches to reducing fraud and tackling fraudulent adverts, but does not specifically address the recommendation to make the FCA warning list a red flag for pension transfers.
Department for Work and Pensions
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17 Recommendation Not Addressed
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
Government Response
The government's response focuses on existing education and ScamSmart advertising campaigns, and TPR's 'Pledge to Combat Pension Scams' for industry. It does not address the recommendation to bring paid-for online advertising under the financial promotions regulatory framework.
Department for Work and Pensions
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18 Recommendation Not Addressed
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
Government Response
The government response provides details on the scope and services of Pension Wise and the Money and Pensions Service, noting their rebranding, but does not address the recommendation for the Online Safety Bill to legislate against online investment fraud.
Department for Work and Pensions
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19 Recommendation Not Addressed
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
Government Response
The government's response focuses on the Money and Pensions Service's remit regarding financial guidance and the FCA's perimeter guidance, completely failing to address the recommendation for voluntary codes of conduct by search engines and social networks for scam advertisement removal.
Department for Work and Pensions
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20 Recommendation Not Addressed
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
Government Response
The government response details the rationale and evaluation of the Pension Advice Allowance and the Financial Advice Market Review, with ongoing monitoring of its effectiveness, but does not address the recommendation for TPR and FCA to continue and evaluate the ScamSmart campaign.
Department for Work and Pensions
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21 Conclusion Not Addressed
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 agrees a public description of Project Bloom members and roles is a beneficial next step and will be taken forward, and a public report on scams measures will be considered alongside wider industry reporting. This does not address the committee's conclusion about consumer understanding of pension advice vs guidance.
Department for Work and Pensions
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22 Recommendation Not Addressed
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
Government Response
The government response outlines the Financial Conduct Authority's (FCA) framework for tackling fraud, its collaboration with other agencies, and its proactive publication of information. It does not address the recommendation for DWP to set out a plan and timetable for Pension Wise appointments becoming the norm.
Department for Work and Pensions
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23 Recommendation Not Addressed
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
Government Response
The government's response focuses entirely on HMRC's role in registering pension schemes and related tax matters, and does not address the recommendation for DWP to consider options for the Money and Pensions Service to offer enhanced guidance or limited advice.
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24 Recommendation Not Addressed
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
Government Response
The government response details actions taken by the FCA to increase consumer awareness of investment scams and explains the governance and complaints mechanisms for financial services regulators, but does not address the recommendation to review or remove caps on the Pension Advice Allowance.
Department for Work and Pensions
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25 Recommendation Not Addressed
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
Government Response
The government discusses Project Bloom's operational footing and its consideration of options for leadership and resourcing, but does not commit to publishing a document outlining roles or reporting annually on pension scam losses and reimbursements as recommended.
Department for Work and Pensions
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26 Recommendation Not Addressed
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
Government Response
The government response details HMRC's willingness to work with pension schemes on guidance regarding tax charges for early pension access. This response does not address the recommendation for the FCA to publish a costed plan for tackling scams or proactively release enforcement data.
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27 Recommendation Not Addressed
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
The government's response discusses HMRC's empathetic approach to customers, tax liabilities on unauthorised payments, and limited discretionary powers. It does not address the specific recommendation that HMRC should make clear that a tax reference is not an endorsement of a given scheme.
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28 Recommendation Not Addressed
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
Government Response
The government's response details HMRC's involvement in the Project Bloom Communications Group and its request to re-join the Strategy Group. It does not address the recommendation to review recourse available to pension scam victims when a regulator's actions have been beneficial to a scammer.
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29 Conclusion Not Addressed
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 government response details the Pensions Regulator's work on assessing value for money provided by independent trustees in scam schemes and the challenges involved in their appointment and recovery efforts, but does not address the conclusion about regulator effectiveness in preventing scams or the impact on industry levies.
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30 Conclusion Not Addressed
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
The government response discusses the role of Independent Trustees (ITs) in recovering assets from scam schemes and the complexities involved, advising against early transfers. It does not address the committee's conclusion regarding Project Bloom's non-statutory status, lack of dedicated funding, or the suggestion of a pension scams hub.
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31 Recommendation Not Addressed
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
Government Response
The government acknowledges scope for further action and a more joined-up approach, then details existing support services provided by MaPS for victims of pension scams and the rollout of the Action Fraud Economic Crime Victim Care Unit. It does not address the recommendation to establish a new statutory Pension Scams Centre with dedicated funding, an intelligence hub, or a public strategy with targets.
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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Government Response AI assessment · 34 of 32 classified
Accepted 2
Acknowledged 3
Deferred 2
Not Addressed 26
Rejected 1
Total 32 recs + 5 conclusions
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