Pensions - Articles - Combating Pension Scams

 “Pension scams continue to be a growing menace ruining peoples’ lives and future retirement plans. Today’s updated code is a step in the right direction to help snuff out the activities of scammers.

 “Pension scammers are adept at reinventing their approach, as one door closes, they find another one to open. Changes to UK tax rules made pension transfers involving qualified registered overseas pension schemes (QROPS) unattractive for scammers, easing the risk of victims losing all of their pension and facing tax charges. However, this method has been replaced by a new approach involving international SIPPs, which are UK schemes and HMRC registered. These are marketed primarily to UK people resident overseas by non-UK advisers. Often the investments are unregulated, and with the additional risk of being offshore, similar to some QROPS, people risk losing all their money. We are pleased that the updated Code of Good Practice highlights this risk and the signs to look out for.

 “To support providers and schemes in their fight against pension scammers, HMRC should be improving its processes and responding more quickly to providers and scheme queries about the receiving scheme’s registration status. Currently this process can take months leaving customers in limbo. Allowing online access so schemes and providers can have access to this information would be a major step forward helping to crack down on pension scams.”