Warnings from pension companies to savers who are looking to transfer their pension somewhere that does not look right are often ignored, says Phoenix Group.
In research conducted in light of Pensions Awareness Day today (15 September) the group found savers are still too vulnerable to scams and are not heeding warnings from pension providers.
Phoenix Group risk and financial crime manager and Pension Scams Industry Group deputy chairman Tommy Burns said: “Worryingly, financial fraud is growing, partly as a result of Covid-19, with scammers taking advantage of the upheaval and the additional financial pressures that some people are facing.
“Pension scams can destroy people’s lives and rob hard-working pension scheme members of the retirement they have worked towards for years. Fraudsters often try to encourage pension savers to transfer their money to them, then they lose all their life savings.”
He continued: “Those who fall victim can face financial ruin as a result of passing over personal data and just one fateful signature on a piece of paper which transfers their pension into the hands of the scammers.”
Phoenix last week called for an amendment to the Pension Schemes Bill to help protect savers, proposing that an individual’s statutory right to transfer is further limited.
The change will allow pension companies will be able to do more to protect pension savers and help tackle pension scams, Burns said.
“But savers also need to be vigilant and aware of the threat. One of the very best ways to avoid being scammed is to learn more about the risks and to recognise when alarm bells should be ringing,” he continued. “While fraudsters’ methods are constantly evolving, there are some common traits to pension frauds. We all need to learn more and be vigilant.”
Speaking at a Society of Pension Professionals online conference this morning, pensions and financial inclusion minister Guy Opperman said the Department for Work and Pensions remained committed to ensuring scam concerns were addressed and suitable regulated.
He said: “Scams are constantly something we are looking at and the Financial Conduct Authority’s [interim chief executive] Christopher Woolard and I have a fantastic working relationship and there is an ongoing weekly dialogue on the best way forward.”