Government crack down on pension scams

• New safeguard proposed to tackle pension fraud.
• Targeted safeguard to end misuse of Small Self-Administered Schemes with average losses rising to £38,400 per person.
• Part of wider government programme to crack down on pension fraud to ensure more can save with confidence.

Pension scams are among one of the most damaging forms of financial fraud. Fraudsters trick savers into transferring their pension pots into bogus schemes, often leaving victims with no way to recover their losses.

The new proposals would mean that where there is no clear link between a saver and the SSAS scheme they are transferring into, a new warning flag would be triggered, enabling the transfer to be stopped.

The consultation also seeks views on cutting red tape that has been slowing down legitimate transfers, making the process simpler for savers who are not at risk of pension fraud.

Torsten Bell MP, Minister for Pensions, said:

Pension scams can rip away not just people's savings, but the retirement they are looking forward to. This Government is determined to stay one step ahead of criminals who seek to exploit savers.

Too often we see fraudsters trying to trick workers into transferring their savings into bogus pensions. We are stepping in to automatically block transfers where the warning signs are flashing red.

Today's consultation is the first step in a wider government programme to tackle pension fraud working with government departments and industry stakeholders, including the Pension Scams Action Group (PSAG). Further measures, including potential new legislation, are being developed this year.

Gaucho Rasmussen, Executive Director of Enforcement & Executive General Counsel at The Pensions Regulator (TPR), on behalf of the Pension Scams Action Group (PSAG), said:

Fraud wrecks lives and tackling it demands strong, coordinated action. Through the Pension Scams Action Group, which TPR leads, we are working closely with the DWP, law enforcement, the pensions industry and other partners to identify emerging threats and stop fraudsters in their tracks.

The targeted safeguard proposed is an important step forward in protecting savers. We urge trustees and administrators to have their say.

Additional information

• The consultation is available at Protecting Pension Savers - Proposals to Amend the Occupational and Personal Pension Schemes (Conditions for Transfers) Regulations 2021 - GOV.UK

• The Occupational and Personal Pension Schemes (Conditions for Transfers) Regulations 2021 were introduced to protect scheme members by enabling trustees to pause or refuse transfers where scam indicators are present. A review published in 2023 found the regulations were broadly effective but identified areas of unnecessary complexity.

• Small Self-Administered Schemes (SSAS) are a type of occupational pension scheme, typically used by small businesses. Growing concern about their potential misuse for fraudulent activity has been highlighted by industry.

• The government's wider programme of work on pension transfer reform and tackling pension scams is expected to include further work in 2026 on longer-term measures, including potential primary legislation.
• The consultation period will provide an opportunity for scheme trustees, scheme members, administrators, and pension professionals to share their views on the proposed changes.