Source · Select Committees · Work and Pensions Committee
Recommendation 2
2
Paragraph: 11
The pension freedoms gave people more choice in how they use their money to meet...
Conclusion
The pension freedoms gave people more choice in how they use their money to meet their own needs. However, by offering pension savers access to a much wider range of investments, the freedoms also removed much of the distinction between pension scams and other types of investment and financial fraud. More than five years on from the introduction of the pension freedoms, the Government and the regulators are still putting in place the necessary support framework to protect pension savers. They must now act quickly and decisively.
Paragraph Reference:
11
Government Response
Acknowledged
HM Government
Acknowledged
Both the Government and Project Bloom members recognise the difficulty in determining the scale of pension scams and the barrier this creates in effectively tackling the problem. We accept the Committee’s observation that the real scale of pension scams is undoubtedly much larger than that reported to Action Fraud. Pension Responses to the Committee’s Fifth Report of Session 2019–21 7 scammers have changed their modus operandi over time – moving from predominantly pensions liberation to a range of ways that savers can ultimately lose funds – and this has presented new problems that need to be tackled seriously. To develop our assessment of the scale of pension scams we all agree the need to build a better intelligence picture through comprehensive reporting by pension schemes in to Action Fraud. This means improving the number and quality of information reports made by industry. Last November, The Pensions Regulator (TPR) launched its ‘Pledge to Combat Pensions Scams’, one of the key principles of which is to report to Action Fraud, and there are ongoing communications encouraging and clarifying the industry reporting process. As referenced in the introduction, the Minister for Pensions and Financial Inclusion has put on record that the industry has to do a great deal more to do, and has written to pension schemes making it clear that they should work with the Pension Scams Industry Group (PSIG) in order to share their data with wider Project Bloom partners. In addition, Project Bloom partners are working together to understand what further issues and barriers to industry reporting exist, how the reporting processes can be improved, and how data is categorised and recorded. This will provide a clearer and more current picture of the scale of the pension scam problem in terms of financial loss and total volumes of reports relating to transfers, pension scams and investment fraud. Both TPR and the Department for Work and Pensions have conducted their own internal reviews into Project Bloom, The Government will look closely at the recommendations of both reviews and then set out the way forward later this year.