Statement season could put 10.6m pension savers at risk

Statement season could put 10.6m pension savers at risk

Some 10.6m pension savers could see their financial information fall into the hands of fraudsters if the government goes ahead with its plans for a statements season, PensionBee has warned.

With pension scams on the increase, the statements season brings a big concern around mail fraud, PensionBee said.

In a survey of 250 individuals, the pensions consolidator found 40 per cent of respondents were moving or had moved home since the pandemic, and 33 per cent of pension savers did not feel concerned about updating their address. 

PensionBee noted moving house and changing jobs were the most common reasons that savers lost track of their pensions — either forgetting to update their contact details with their provider, or losing their providers’ details themselves.

Considering there are 32m workers in the UK aged 16 or over, and the average pot size is £21,164, PensionBee estimated that £64.4bn of total savings are at risk of being lost to mail fraud and pension scams as a result of expired contact details.

The rise in pension scams and the risk of postal data breaches could lead to an increase in call centre fraud, with the potential for catastrophic results for pension savers, the provider added.

Romi Savova, chief executive of PensionBee, said “while the pensions minister’s plans are well intentioned, little thought has been given to the grave risks this could pose to savers. 

“Statements season or no statements season, the vast majority of pension providers still rely on post to communicate with their customers, so it’s imperative that savers always ensure their contact details are up to date when they move house. 

“Losing track of hard-earned savings can have a significant impact in later life, and could see millions of people working for far longer than they would otherwise need to before they can afford to comfortably retire.”

The Department for Work and Pensions is looking at options to develop a statements season proposed in its recent, simpler annual benefit statements consultation, in a bid to standardise and simplify these documents.

Guy Opperman, minister for pensions and financial inclusion, has recently defended this proposal, which would see all savers receive their annual pension statement in the post at the same time, despite criticism from the industry.

Fatima Benkhaled is a reporter at FTAdviser's sister title Pensions Expert.