Fifth report: Protecting pension savers—five years on from the pension freedoms: Pension scams

The government acknowledges the importance of collaborative work between DWP, HM Treasury, and other departments to address vulnerabilities exploited by fraudsters, and commits to publishing a comprehensive Fraud Action Plan after the Spending Review.

The government acknowledges the scale of pension scams and efforts to build a better intelligence picture through industry reporting. However, it defers comprehensive action on putting in place the necessary support framework, stating it will look closely at the recommendations from internal Project Bloom reviews and set out the way forward later in the year.

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.

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.

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.

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.

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.

The government acknowledges the need for improved coordination by stating Project Bloom is exploring options for industry intelligence sharing and reporting. However, it does not commit to Action Fraud taking a direct coordinating role for victims by setting up appointments or other bodies routinely recording cases with Action Fraud.

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.

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.

The government agrees with the recommendation to facilitate information sharing and legislate for required industry participation, noting it aligns with DWP's policy review. However, it cannot guarantee legislative changes will occur within the current Parliament, making action dependent on future review and timetable.

The government agrees with the recommendation for Project Bloom to encourage pledge sign-ups and for TPR to monitor and report, stating that this will form part of the Department for Work and Pension’s plan to review the policy.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

The government stated that it is already in the process of thoroughly assessing the value for money provided by independent trustees appointed to scam schemes, detailing existing competitive tender processes, increased firm invitations, and cost scrutiny by an independent adjudicator.

The government rejects the recommendation, explaining that funds are often already dissipated, trust law prevents earmarking, and transferring out early may not be in a member’s best interest or could negatively impact other members.

The government agrees there is scope for further action and describes existing services from MaPS and the Action Fraud Economic Crime Victim Care Unit (ECVCU), which is being rolled out further. However, it does not commit to DWP leading the creation of a new, specific strategy for pension scam victims covering both financial and psychological harm.