Asked by: Neil Gray (Scottish National Party - Airdrie and Shotts)
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, what steps the Government is planning to take to increase public awareness of the risks of pension scams.
Answered by Guy Opperman - Parliamentary Under-Secretary (Department for Transport)
The Government is committed to safeguarding consumer savings. The Government is raising public awareness of scams through ongoing communications directly from DWP and with other organisations.
Joint and independent communications from the FCA and tPR spelling out the dangers, what to watch out for and giving clarity to trustees and providers on the boundaries between guidance and advice have been issued since April this year (https://www.fca.org.uk/news/press-releases/covid-19-savers-stay-calm-dont-rush-financial-decisions). Prior to Covid-19 the FCA and tPR conducted regular campaigns, through the ScamSmart branding, to raise awareness of pension scams and what to watch out for, these have been deemed very successful, over 222,000 visited the ScamSmart website to find out how to identify a scam scheme as a result of the most recent pre Covid campaign, July – November 2019.
In addition, Government is actively monitoring the numbers of transfers and scams and preparing further policy responses. At the onset of the covid-19 pandemic, the Department convened a cross-government and regulator group to closely monitor and respond to any increase in transfers and scams. The group includes DWP, HMT, both the Pensions Regulator and the FCA as well as the Money and Pensions Service and the Pension Ombudsman. All of the participating organisations have confirmed that to date no evidence has emerged of an increase in either transfers or scams, based on their internal monitoring of the industry.
DWP continues to communicate regularly on social media to set out the warning signs of a scam and has made multiple posts referencing Pension Scams and #ScamSmart in total across Twitter, Facebook and LinkedIn in the period March to September 2020.
The Pension Schemes Bill was amended by Government in the House of Lords to add to the example conditions that can be placed on the statutory right to transfer by regulations. This amendment makes it explicit that the regulations can require that in certain circumstances the member demonstrates they have taken information or guidance before the transfer can proceed to ensure they are informed of the risks.
The Government wants to support all pension savers aged 50 and over in the lead up to accessing their pension savings, to make informed choices about their retirement income, which includes making them aware of Pension Wise through communications from their pension scheme trustees. We intend introducing Single page summary and single page risk warnings from age 50 and then every 5 years until the point they access their pension savings.
The Money and Pensions Service (MaPS) conducted trials to establish different ways to encourage more people to take Pension Wise guidance before accessing their pension savings under Pension Freedoms. These trials found that a nudge developed using behavioural science principles significantly increased take-up of Pension Wise guidance among those wishing to access their pension savings under pension freedoms. The evaluation report was published in July 2020. We are working to develop the most effective and proportionate way to implement this nudge to pension guidance. We intend to publish our proposed way forward shortly.
In addition we have banned cold calling and seek to provide and prosecute and publicise the convinction of all who comitt pension scams.
Asked by: Neil Gray (Scottish National Party - Airdrie and Shotts)
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, what assessment her Department has made of the potential merits of implementing a training programme for pension and finance professionals to help ensure they can readily identify scam risks.
Answered by Guy Opperman - Parliamentary Under-Secretary (Department for Transport)
The Government is committed to safeguarding consumer savings. The Government is raising public awareness of scams through ongoing communications directly from DWP and with other organisations.
Joint and independent communications from the FCA and tPR spelling out the dangers, what to watch out for and giving clarity to trustees and providers on the boundaries between guidance and advice have been issued since April this year. Prior to Covid-19 the FCA and tPR conducted regular campaigns, through the ScamSmart branding, to raise awareness of pension scams and what to watch out for, these have been deemed very successful, over 222,000 visited the ScamSmart website to find out how to identify a scam scheme as a result of the most recent pre Covid campaign, July – November 2019.
In addition, Government is actively monitoring the numbers of transfers and scams and preparing further policy responses. At the onset of the covid-19 pandemic, the Department convened a cross-government and regulator group to closely monitor and respond to any increase in transfers and scams. The group includes DWP, HMT, both the Pensions Regulator and the FCA as well as the Money and Pensions Service and the Pension Ombudsman. All of the participating organisations have confirmed that to date no evidence has emerged of an increase in either transfers or scams, based on their internal monitoring of the industry.
Please see links below for more information about the joint statement from Regulators and the Money Advice Service, and help available, produced by the Pension Protection Fund and supported by government.
https://www.fca.org.uk/news/press-releases/covid-19-savers-stay-calm-dont-rush-financial-decisions
https://www.ppf.co.uk/sites/default/files/file-2020-05/COVID-19-and-your-pension.pdf
DWP continues to communicate regularly on social media to set out the warning signs of a scam and has made 18 posts referencing Pension Scams and #ScamSmart in total across Twitter, Facebook and LinkedIn in the period March to September 2020.
The Pension Schemes Bill was amended in the House of Lords to add to the example conditions that can be placed on the statutory right to transfer by regulations. This amendment makes it explicit that the regulations can require that in certain circumstances the member demonstrates they have taken information or guidance before the transfer can proceed to ensure they are informed of the risks.
The Government wants to support all pension savers aged 50 and over in the lead up to accessing their pension savings, to make informed choices about their retirement income, which includes making them aware of Pension Wise through communications from their pension scheme trustees. We intend introducing Single page summary and single page risk warnings from age 50 and then every 5 years until the point they access their pension savings.
The Money and Pensions Service (MaPS) conducted trials to establish different ways to encourage more people to take Pension Wise guidance before accessing their pension savings under Pension Freedoms. These trials found that a nudge developed using behavioural science principles significantly increased take-up of Pension Wise guidance among those wishing to access their pension savings under pension freedoms. The evaluation report was published in July 2020. We are working to develop the most effective and proportionate way to implement this nudge to pension guidance. We intend to publish our proposed way forward shortly.
We will continue to work collaboratively with organisations and regulators to look at all interventions which can better protect savers.
Asked by: Baroness Warwick of Undercliffe (Labour - Life peer)
Question to the Department for Work and Pensions:
To ask Her Majesty's Government, further to the report by Police Foundation and The People’s Pension Protecting People’s Pensions: Understanding and Preventing Scams, published on 7 September, what action they are taking to protect people from pension scams.
Answered by Baroness Stedman-Scott
The Government is committed to safeguarding consumer savings and we want individuals to better understand the choices they have and the risks that exist.
Since the introduction of the pension freedoms in 2015, we have made several legislative interventions to tackle scams. The Finance Act 2018 strengthened the HM Revenue & Customs process for registering pension schemes, thereby reducing the risk of fraudulent schemes being established. In 2019, HM Treasury introduced a ban on pension cold calling, to reduce the chance of individual’s being enticed into such schemes. We are now introducing a clause in the Pension Scheme Bill that allows legislation to set conditions on members’ statutory right to transfer, and thereby introduces two additional barriers to protect people. The clause sets examples of the conditions that must be applied to statutory transfers unless requests are to either a firm regulated and authorised by the Financial Conduct Authority or an authorised Master Trust. The legislation will require members to confirm they have obtained information or guidance of the associated risks of scams, and still want the transfer to go ahead.
We will also be bringing forward new information requirements from the age fifty to those with defined contribution pension savings, that will inform them in more simplified terms, about their retirement options and the availability of guidance to help with their decisions. We see accessing guidance as a natural part of the journey savers take, before making a decision relating to the pension freedoms. Following the recent trials, which showed a nudge to guidance during the application process is effective, we will be commencing section 19 of the Financial Guidance and Claims Act 2018, which amends the Pension Schemes Act 1993.
The Government has, and will, continue to work with industry and regulators to identify the circumstances that cause most concern (‘red flags’), so that we can determine how best to use legislation that ensures members at high risk are protected.
The Department Work and Pensions (DWP) continues to work with other Government Departments, regulators, enforcement agencies and the pensions industry to monitor the evolution of the methods scammers use and raise awareness of these through coordinated campaigns. The pre-COVID campaign, July – November 2019, resulted in over 222,000 visits to the ScamSmart website, to find out how to identify and report a scam.
DWP has also supported industry initiatives such as the Regulators and Money and Pension Service joint statement, to industry encouraging individuals not to make hasty decisions and endorsed equivalent initiatives by the Pension Protection Fund.
DWP has set out warning signs of scams on social media and made 18 posts referencing Pension Scams and ScamSmart in total across Twitter, Facebook and LinkedIn in the period March to September 2020.
We continue to monitor the situation closely and will take necessary action to protect savers from scams.
Asked by: Mike Amesbury (Labour - Weaver Vale)
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, with reference to the finding of the Financial Conduct Authority that pension scammers take on average £91,000 from each of their victims, what assessment her Department has made of additional protections required to protect UK pensioners (a) in the UK and (b) overseas from pension transfer scams.
Answered by Guy Opperman - Parliamentary Under-Secretary (Department for Transport)
Action was taken by the Pension Regulator, Financial Conduct Authority, and Money Advice and Pension Service on 7 April pointing to the actions members should seek to take to safeguard against becoming victims of scams. Additional guidance was issued to trustees, and providers from both The Financial Conduct Authority and the Pensions Regulator to support them to produce suitable communications during the Covid-19 outbreak.
Please see links below for more information about the joint statement from Regulators and the Money Advice Service, and help available, produced by the Pension Protection Fund and supported by government.
https://www.fca.org.uk/news/press-releases/covid-19-savers-stay-calm-dont-rush-financial-decisions
https://www.ppf.co.uk/sites/default/files/file-2020-05/COVID-19-and-your-pension.pdf
All of Government is committed to safeguarding consumer savings amongst those based in the UK and living overseas with UK based pension savings. We have adopted a layered approach building from interventions to assist all pension savers seeking to access their pensions to those who are most at risk of scams.
For all pension savers aged 50 and over, in the lead up to accessing their pension savings, our aim is to support them make informed choices about their retirement income. We are therefore committed to replicating measures introduced by the FCA for contract based schemes for occupational pension schemes and requiring trustees to provide information to pensions savers from the age of 50, in a simpler format, to encourage savers to think about their retirement savings, choices and raise awareness of Pension Wise.
We want to encourage savers with to take appropriate guidance (currently provided by MAPS under the Pension Wise brand) when they exercise their Pension Freedoms by applying to access savings. Recent trials showed a nudge to guidance during the application process is effective. We want to present taking guidance as a natural part of the journey when individuals access their pension savings. We are working with the FCA on rules that would require managers of private pension schemes to Introduce parallel provisions.
Although the majority of transfers are to safe destinations there are still fraudsters who try to entice individuals to transfer to schemes for the purposes of relieving them of their pension savings.
To help protect people from pension scams, government has introduced an amendment to clause 125 in the Pension Schemes Bill 2020 limiting the statutory right to transfer The clause achieves two things:
In addition, the Government, working with the regulators and the Money and Pension Service, has been communicating with pension savers to alert them to the risk of scams in the current climate. DWP continues to communicate regularly on social media about the warning signs of a scam.
Asked by: Henry Smith (Conservative - Crawley)
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, how many people have contacted Action Fraud on potential pension scams since the covid-19 outbreak.
Answered by Guy Opperman - Parliamentary Under-Secretary (Department for Transport)
The Government continues to work with Regulators and the Police to prevent scams and this has continued during Covid-19. In the period March – July 2020, 116 reports of pension fraud were received by Action Fraud, compared to 179 for the same period in 2019.
In recognition of the potential impact of Covid-19 on individual’s pensions savings the Department convened a cross-government and regulator group, to closely monitor and respond to any increase in transfers and scams. Regulators, Police and Action Fraud have confirmed that to date no evidence has emerged to demonstrate an increase in either transfers or scams, based on their internal monitoring of the industry. Although this is encouraging Government recognises it needs to continue to monitor and react to the changing environment.
Asked by: Henry Smith (Conservative - Crawley)
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, what discussions her Department has had with HMRC on its investigation of tax rule breaches arising from pension scams.
Answered by Guy Opperman - Parliamentary Under-Secretary (Department for Transport)
Tax liabilities relating to unauthorised payments and HMRC’s investigation of tax rules arising from pension scams are the responsibility of HMT. DWP will continue to work closely with HMRC to understand their position and how these may impact the Pensions Schemes Bill and savers.
Government continues to work with regulators and industry to protect consumers and find the best ways of preventing pension scams. HMRC and DWP have held regular discussions relating to the enhanced protection measures in the Pension Scheme Bill 2020.
Asked by: Henry Smith (Conservative - Crawley)
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, what assessment her Department has made of the potential increase in pension scams since the covid-19 outbreak.
Answered by Guy Opperman - Parliamentary Under-Secretary (Department for Transport)
Through Project Bloom, DWP works with other government departments, regulators, enforcement agencies and the pensions industry to monitor the evolution of scam typology and respond with a collective and coordinated response. Project Bloom is examining the range of measures that all agencies including providers and financial professionals could take to help prevent scams.
At the onset of the covid-19 pandemic, the Department convened a cross-government and regulator group to closely monitor and respond to any increase in transfers and scams. The group includes DWP, HMT, both the Pensions Regulator and the FCA as well as the Money and Pensions Service and the Pension Ombudsman. This is supported by cross government and regulator gathering, monitoring and evaluating of data in order to develop as complete and robust a picture as possible. At this point the Department doesn’t yet have any robust evidence showing an increase in pension scams activity but will continue to monitor across the industry.
In addition to active monitoring, the Government, working with the regulators and the Money and Pension Service has been communicating with pension savers to alert them to the risk of scams in the current climate. DWP continues to communicate regularly on social media out the warning signs of a scam. A joint statement was issued by The Pension Regulator, Financial Conduct Authority, and Money Advice and Pension Service on 7 April pointing to the actions members should seek to take to safeguard against becoming victims of scams. Additional guidance was issued to trustees, and providers from both The Financial Conduct Authority and the Pensions Regulator to support them to produce suitable communications during the Covid-19 outbreak.
Please see links below for more information about the joint statement from Regulators and the Money Advice Service, and help available, produced by the Pension Protection Fund and supported by government.
https://www.fca.org.uk/news/press-releases/covid-19-savers-stay-calm-dont-rush-financial-decisions
https://www.ppf.co.uk/sites/default/files/file-2020-05/COVID-19-and-your-pension.pdf
Asked by: Henry Smith (Conservative - Crawley)
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, what assessment her Department has made of the potential merits of implementing a training programme for pension and finance professionals to ensure they can more readily identify scam risks.
Answered by Guy Opperman - Parliamentary Under-Secretary (Department for Transport)
The Government is committed to working closely with industry, regulators and pension scheme providers to help identify and prevent scams, it is working with Project Bloom, the Pension Regulator led taskforce, to stop scams and co-ordinate action against offenders.
Through Project Bloom, DWP works with other government departments, regulators, enforcement agencies and the pensions industry to monitor the evolution of scam typology and respond with a collective and coordinated response. Project Bloom is examining the range of measures that all agencies including providers and financial professionals could take to help prevent scams.
DWP will consider with Project Bloom, industry and the regulators the feasibility of how a training programme could be developed. This would build on training individual providers already provide for their people.
Asked by: Henry Smith (Conservative - Crawley)
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, what discussions her Department has had with (a) pension regulators, (b) pension providers and (c) HMRC on encouraging victims of pensions scams to report that scam.
Answered by Guy Opperman - Parliamentary Under-Secretary (Department for Transport)
Through Project Bloom, DWP works with other government departments, regulators, enforcement agencies and the pensions industry to monitor the evolution of scam typology and respond with a collective and coordinated response. Project Bloom is examining the range of measures that all agencies including providers and financial professionals could take to help prevent scams.
DWP consistently works with other organisations to raise awareness of pension scams and encourage reporting, including regular campaigns, from the Financial Conduct Authority and the Pensions Regulator, conducted through the ScamSmart branding. Alongside promoting what to look out for to recognise a pension scam, the ScamSmart campaigns and website encourage people to report when they think they have been scammed. These messages are proving effective, in the most recent campaign prior to Covid-19, June to September 2019 over 222,000 visited the ScamSmart website to find out how to identify a scam scheme and report a scam.
The Government, working with the regulators and the Money and Pension Service communicates with pension savers to alert them to the risk of scams in the current climate. DWP continues to communicate regularly on social media to set out the warning signs of a scam and has made 18 posts referencing Pension Scams and ScamSmart in total across Twitter, Facebook and LinkedIn in the period March to September 2020.
A joint statement was issued by The Pension Regulator, Financial Conduct Authority, and Money Advice and Pension Service on 7 April pointing to the actions members should take to help safeguard against scams. Additional guidance was issued to trustees, and providers from both The Financial Conduct Authority and the Pensions Regulator to support them to produce suitable communications during the Covid-19 outbreak.
Please see links below for more information about the joint statement from Regulators and the Money Advice Service, and help available, produced by the Pension Protection Fund and supported by government.
https://www.fca.org.uk/news/press-releases/covid-19-savers-stay-calm-dont-rush-financial-decisions
https://www.ppf.co.uk/sites/default/files/file-2020-05/COVID-19-and-your-pension.pdf
Asked by: Virendra Sharma (Labour - Ealing, Southall)
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, what steps her Department is taking to protect people from pension scams and fraud.
Answered by Guy Opperman - Parliamentary Under-Secretary (Department for Transport)
In these unprecedented times we are committed to protecting people from pension scams and fraud. DWP is working with other Government Departments, the Pension Regulator, Financial Conduct Authority and other industry bodies to raise awareness and to monitor for evidence of an increase in pension related fraudster activity. We will continue to use evidence available, to identify what specific and proportionate measures may be necessary.
Government has introduced measures to tackle pension scams following the December 2016 Pension Scams: Consultation link. These include making it harder to open fraudulent schemes from 2018, and legislating to introduce a ban on cold calling in relation to pensions in January 2019.
DWP is also bringing forward legislation, through the Pension Schemes Bill which is currently passing through Parliament. These measures will give trustees’ assurance they will not be required to make statutory transfer, unless specified conditions are met.
The PPF, in collaboration with regulators and pensions bodies, recently published a guide,’COVID-19 and your pension: where to get help’, which answers common pension concerns and helps individuals find the right support. This includes guidance for individuals who are concerned about pension scams.
https://www.ppf.co.uk/covid-19-pensions