In December 2016, the Department for Work and Pensions together with HM Treasury launched a consultation on a package of measures to tackle three different areas of pension scams. Pension scams commonly target those who have not yet reached the minimum pension age.
The three areas being considered are:
- A cold calling ban. This measure would cut off a key source of pension scams whilst also sending a clear message to consumers that they should hang-up if they are cold called about their pension.
- Scheme transfers. The current legislation gives pension schemes limited scope to refuse a transfer to a scheme which looks like a scam, even if they have legitimate concerns as to the safety of a member’s savings. The consultation is looking to clarify the law so that firms can block pension transfers based on clear objective criteria.
- The Pensions Regulator. Currently single-member occupation pension schemes are not required to register with The Pensions Regulator, and can be set up using a dormant company as the sponsoring employer. They are therefore an easy way for fraudsters to register a pension scheme with HMRC. The rules are expected to be changed to make it a requirement that only active companies can register a pension scheme.
The consultation closed last month and HMRC has now confirmed that a full government response will be set out later in the spring.