Pension scammers are taking advantage of Brexit uncertainty

Pension scammers are taking advantage of Brexit uncertainty

Pension scammers are taking advantage of Brexit uncertainty, the chairwoman of the Pension Scams Industry Group has warned.

Speaking today (July 18) at an event organised by XPS Pensions Group, Margaret Snowdon revealed that savers were increasingly being lured into transferring their savings into international self-invested personal pensions.

She said: "There is more activity in this area since Brexit, as individuals are feeling nervous and are concerned about the future.

"By transferring their pension outside the country it takes them away from that area of uncertainty."

Ms Snowdon added there was nothing wrong with savers using Sipps but often it was also the vehicle used by pension scammers.

The Pension Scams Industry Group, formerly the Pensions Liberation Industry Group, is a voluntary board made up of representatives from trade and consumer bodies, administrators, trustees, industry bodies, providers, legal and technical experts.

This was not the first time PSIG had alerted to personal pension schemes being used for pension scams.

PSIG conducted a pilot survey among three providers - Phoenix Life, Standard Life and XPS Pensions Group - which covered more than 27,000 pension transfer requests, from defined benefit to defined contribution schemes, worth £1.33bn in total.

Sipp providers, including international firms, accounted for 95 per cent of the requests.

Paul Gibson, managing director at Granite Financial Planning, said: "Scammers will use any excuse to try and con people.

"Transfers to international schemes should raise alarm bells at providers but I am not sure enough is being done to prevent scams.

"Sending out a warning leaflet out clearly is not sufficient."

Last month, the industry group updated its voluntary code of practice to include regulatory changes and emerging scams which have impacted the industry over the past year.

At the time, Ms Snowdon said: "It will take the introduction of legislation to truly end the growing problem of pension scams but in the meantime, our voluntary code provides essential guidance and tools to help trustees and providers identify, and protect, their members and themselves from suspicious activity."

According to data published by the FCA in January, victims of pension scams lost an average of £91,000 each to fraudsters in 2017.

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