Data from Report Fraud shows the terrible impact pension fraud has on victims, the average financial loss in 2024 to 2025 was £18,400, and where an investment was identified as the primary vehicle for pension fraud, as is commonly observed in case studies relating to SSASs, the average loss per victim increases drastically to £38,400.
This consultation sets out targeted measures to address the risk of fraud within SSASs and marks the first step in a wider, ongoing Government programme to tackle pension fraud, in alignment with the Government Fraud Strategy 2026 to 2029.
David Brooks, Head of Policy at leading independent pensions consultancy Broadstone, commented: "The Government is right to maintain a laser focus on pension scams and developing a comprehensive and robust scam protection framework will be essential to ensuring savers are able to avoid the significant financial and emotional damage that these criminals can cause.
“Small Self-Administered Schemes play an important role in creating retirement savings for many business owners and entrepreneurs. The proposal to move from an amber to a red flag where an employment link cannot be demonstrated is a targeted intervention that should help prevent transfers into arrangements that may not be operating for legitimate pension purposes.
"Importantly, these measures represent only the first stage of what appears to be a much broader Government focus on tackling pension scams and fraud. As DC pension savings continue to grow, increasingly large retirement pots are becoming more attractive targets for scammers. At the same time, fraudsters are continually adapting their methods, making greater use of sophisticated investment structures, digital channels and increasingly convincing approaches to gain savers' trust.
"It is therefore encouraging to see the Government signalling further work on scam prevention, transfer processes and member protections. The industry will need to remain vigilant and continue working closely with regulators, government and law enforcement to ensure safeguards evolve as quickly as the threats they are designed to combat. Protecting savers' confidence in the pensions system will be critical as more individuals take greater responsibility for their retirement decisions."
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