DWP confirms new measures to stop pensions scams

New measures to protect pension savers and help stop scam transfers have now become law, the government has announced.

The Department for Work and Pensions confirmed the new regulations are to come into force on Tuesday 30 November and will mean suspicious transfers can be stopped from ending up in the hands of a fraudster, with pension trustees and scheme managers given new powers to intervene.

Where there are tell-tale signs of fraud or methods frequently used by scammers, trustees and scheme managers will be able to prevent a transfer request – giving it a “red flag”. In other circumstances where fraud is suspected, the DWP confirmed that an “amber flag” will pause a transfer until the scheme member can prove they have taken scam specific guidance from the Money and Pensions Service (MaPS).

Complaints received after the regulations come into effect will be investigated within the framework of those regulations on a case by case basis, the DWP added, having regard to the facts and evidence in each case.

Pensions Minister, Guy Opperman, said that DWP is tackling the “scourge of pension scams” in practical terms to safeguard pensioners’ savings, adding that the measures would provide better protection for savers.

The measures have been welcomed by Canada Life technical director, Andrew Tully, who commented: “It is well documented how many people are affected by scams and there are many sad personal stories behind the large monetary amounts involved.

“However, there are relatively few scams around transfers before age 55, as most people know there are only very limited circumstances where you can access your money legally before age 55. Instead scammers largely wait until people can legally access their money from age 55 onwards and these measures do nothing to prevent those scams.

“While more safeguards are helpful, people want, and expect, pension schemes and providers to move money to a new provider quickly and safely. We need to make sure the vast majority of transfers which are being legitimately transferred by the member are not unduly delayed by these new measures.”

The government has also committed to reviewing the new regulations within 18 months to ensure they remain as “effective as possible”, a move welcomed by Aegon head of pensions, Kate Smith.

“Today’s confirmation of additional protections for pension scheme members is a major win for common sense over unscrupulous scammers,” Smith said.

“We’re pleased, however, that the Pensions Minister plans to review the effectiveness of these measures going forward. Scammers are always looking for new ways of parting people from their money and government, regulators, schemes and providers must continue to work together to maximise member protection.”

    Share Story:

Recent Stories

Conveyancing Transformation
Adam Cadle talks to ULS technology CEO Jesper With-Fogstrup about making home moving a pleasant experience


Subscribe to our newsletter to receive breaking news and other industry announcements by email.

  Please tick here to confirm you are happy to receive third party promotions from carefully selected partners.