This week the UK policing think-tank, The Police Foundation, published its much anticipated Report on pension scamming in the UK.

The Report was published in conjunction with the People’s Pension and other key industry players, and is particularly timely given the increased vulnerability of pension savers to scams in light of Covid-19.

Key findings

  • Pension benefits make up approximately 42% of aggregate household wealth in the UK (that’s more than property). Pension benefits are immensely valuable economic assets that need to be better protected.
  • The scale of pension scamming is far greater than official figures suggest. The term “scam” encapsulates a broad spectrum of activity: from the ethically dubious but legally sound, right through to criminal fraud. The result is that there are no reliable statistics which show the true extent of the problem. But industry experience tells us it’s a lot worse than we might think.
  • The fact that most pension savers have a statutory right to transfer their pension thwarts efforts to protect them from scams.
  • People have been given more freedom to access their pension in a way that suits them, but this new freedom has not been matched by a corresponding level of personal understanding or feeling of responsibility. Many people lack the engagement, experience or knowledge to navigate what can be a confusing area of finance. Engagement with resources such as Scamsmart continues to be lower than expected, and most savers who are warned that their transfer request may be a scam choose to proceed anyway.

Key recommendations for change

  • Schemes should have to perform enhanced due diligence checks on transfer requests, and report suspected scams to their regulator. It should be mandatory for those involved to have training to help them identify scams. Pension scams are increasingly complex, often blending both legitimate and illegitimate elements that can make them hard to spot. Standards of due diligence currently vary, and the result is that some pension savers are better protected than others.
  • A new framework should be developed, modelled on the Banking Protocol, which gives pension companies the power to trigger an urgent regulatory response to savers at risk of being scammed. The Banking Protocol allows frontline staff in the banking sector to act on concerns by initiating an emergency response from the police or Trading Standards. There is currently no mechanism by which the pensions industry can trigger a similar response.
  • Regulators should be given the power to override an individual’s statutory right to transfer. Individuals who disagree with the regulators’ decisions would then have a right of appeal to the Pensions Ombudsman.
  • The definition of pension scamming should be widened to ensure crime data more accurately reflects what’s happening on the ground.
  • A central intelligence database should be created to make collecting and analysing intelligence easier. While industry led intelligence-gathering already exists, there is need for a more comprehensive and systematic approach.
  • A system should be introduced whereby HMRC will not hold victims of pension scams liable for any related tax penalties. Scam victims often suffer heavy tax penalties, which can add insult to injury.
  • Pension ‘introducers’ should be subject to regulation. Introducers are a consistent feature of many pension scams, and usually sit outside the FCA’s remit.


The Report’s findings reflect the experience of many of us working on the ground, and its research is hugely valuable in highlighting the complex issues that make pension scamming a tricky problem to solve.

Its recommendations are far-reaching, targeting crucial areas where change is required. But there is no getting away from the fact that they are ambitious, and implementing them would require a level of cross-agency and cross-sector collaboration that is unprecedented in this area. It would also rely on many agencies being willing to adopt wholesale change and take on greater responsibility – which they may or may not be happy, or funded, to do.

The nuances of the recommendations themselves also require careful consideration to ensure they would work effectively in practice. For example, it is difficult to see how HMRC would be able to adequately assess the culpability of a scam victim to determine whether it was appropriate to waive the tax penalties that would normally apply to them. In many cases there will simply be no reliable evidence of the victim’s level of understanding or motivation. Similarly, it may be unrealistic to expect that regulators will have the resource to review the (potentially thousands) of suspicious transfer requests that may be reported to them every year to determine whether they should override a member’s statutory right.

Increasing the focus on the dangers of pension scamming is not only welcome, but essential, and the Police Foundation should be credited for their work in doing that.

If you’re a trustee, provider or employer and need advice in this area, we’d be happy to help.