The Department for Work and Pensions (DWP) has announced a new crackdown on pension fraud, with victims losing an average of £38,400 per person. The DWP has proposed targeted safeguards to tackle the misuse of Small Self-Administered Schemes (SSAS).
New Safeguards to Block Suspicious Transfers
In a major announcement on Tuesday, June 9, the Labour Party government stated that it would introduce measures to end the abuse of SSAS schemes, where average losses have risen to £38,400 per person. The new proposals would trigger a warning flag when there is no clear link between a saver and the SSAS scheme they are transferring into, enabling the transfer to be stopped automatically.
Part of Wider Government Programme
This initiative is part of a broader government programme to crack down on pension fraud and ensure that more people can save with confidence. 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.
Ministerial Statement
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."
Collaboration with Stakeholders
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."
