By Jonathan Watts-Lay, Director, WEALTH at work
Pension scams are a persistent problem which have a devastating impact on those who become victims. Our research* with the Pensions Management Institute shows that a staggering 92% of Trustees expressed that they have fears their members approaching retirement will be targeted by scammers.
The strain on household finances caused by the cost of living crisis could mean that some members are more vulnerable than ever this year. With almost a quarter (22%) of UK adults having reported being approached by scammers offering free pension advice or a free pension review, investment opportunities, or a tax refund between March and May this year, it’s clear that these fears are well founded.
Defined benefit (DB) pension transfers are a particular area of concern, and the XPS Pension Group has reported an all-time high in July of 97% of transfer cases as having one or more scam warning sign. Indeed, the majority (86%) of Trustees in our survey* have concerns over this. It’s unclear yet if the measures put in place to enable Trustees and Scheme Managers to block or pause suspicious transfers have helped the situation.
The Pensions Regulator (TPR) has recently launched its new scam fighting strategy in light of concerns that the cost-of-living crisis may leave savers more vulnerable to scammers. The strategy will build on TPR’s pledge to combat pension scams campaign which includes providing regular scam warnings, encouraging members considering cash drawdown to access guidance services, to carrying out checks and provide warnings on high-risk transfers.