Pension Safeguarding Guidance was issued by the Department for Work and Pensions (DWP) at the end of November 2021 to the pensions industry and to trustees of ‘ceding’ pension schemes i.e., the pension that you already have in place. This guidance was issued to encourage ceding pension schemes to monitor and watch out for potential pension scams.
The guidance given that pension schemes should conduct due diligence on any receiving pension scheme i.e., the pension scheme making the request to transfer your pension fund to them. Scheme trustees should highlight any suspect schemes with red or amber warnings or flags and then conduct an anti-scam pension transfer interview with the pension scheme member i.e., you, the consumer.
Under a Freedom of Information request by LCP Consultants, it was found that nearly 500 anti-scam interviews have taken place between December 2021 and March 2022. This is perhaps not enough and more needs to be done to protect the consumer.
The DWP’s guidance suggest that ceding pension schemes should look out for red flags such as:
The FCA estimated in 2021 that nearly £2.25bn in pension transfer scams would take place in 2021. This is clearly unacceptable and more should be done hence these new pension transfer anti-scam interviews.
The DWP, The FCA and indeed both pension companies and advisers need to do more.
Police: Action Fraud UK https://www.actionfraud.police.uk/
Financial Conduct Authority ScamSmart https://www.fca.org.uk/scamsmart
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