Pension Freedom 

Regulator admits scale of pension scams is unknown

Regulator admits scale of pension scams is unknown

The real value of pensions being taken by scammers in unknown, as The Pensions Regulator and other enforcement agencies don’t know how much money has been lost in these frauds.

The official figure, from Action Fraud, shows that has been £43m lost to pension scams since April 2014.

However, this number doesn’t represent the full scale of pension scams, said Lesley Titcomb, TPR chief executive, in response to a letter from MP Frank Field, chair of the Work and Pensions Committee.

The committee is currently conducting an inquiry to pension freedoms. Introduced in 2015, the new rules allow savers to access their pension pots prior to retirement, which has increased the number of scams.

She said: “This figure is only in relation to reports to the police and does not include reports to other agencies.”

Ms Titcomb quoted figures given by Margaret Snowdon, chair of the Pensions Administration Standards Association (PASA) and of the Pension Liberation Group, which recently revealed that pension savers have lost more than £1bn to scams.

Ms Snowdon said "official statistics can really be under reported," since people are reluctant to say that they have been scammed.

Project Bloom, a multi-agency taskforce led by TPR which is working with government, the pensions industry, law enforcement agencies and other regulators to combat pension scams, has identified a number of agencies which receive reports from these victims, Ms Titcomb said.

She added: “Project Bloom is looking at how to collate all the data received with the aim of providing a more accurate assessment of the scale of pension scams.

“It is difficult to ascertain a figure for pension scams relating to freedoms, as once money has left the pension regime it is difficult to track, and also victims may not mention pension freedoms when reporting.”

Michelle Cracknell, chief executive of The Pensions Advisory Service (Tpas), is against spending more resources in this matter.

Speaking yesterday at a Transparency Task Force seminar in London, she said:

“Do we really need to know if its £5bn, £6bn that have been scammed?

“Logic tells me that it is a lot of money, isn't enough [to know that] and can we spend our resources on other things?”

The guidance body is currently working on a pilot project with the Pension Ombudsman to help savers rebuilding their pension pots.