When we look back on 2020, it’s likely we’ll remember it as the year we did everything online. The jury is still out on whether video calls can ever fully replace traditional meetings or conferences, but our recent webinar on pension scams proved that a lively and productive discussion is possible virtually. The session, followed on from the publication of our scams report with the Police Foundation, which has since been raised in the House of Lords along with parliamentary questions from MPs across the political spectrum.
We brought together a panel of pensions experts and influencers to grapple with the question Who is protecting my pension? hosted by former pensions minister Baroness Ros Altmann. Joining her were Rt. Hon Stephen Timms MP (chair of the Work and Pensions Committee), Dr Rick Muir of the Police Foundation, Margaret Snowdon (chair of the Pension Scams Industry Group) and our own Phil Brown, Director of Policy and External Affairs.
Several parliamentarians and their staff participated in the discussion, including Angela Eagle MP, Shaun Bailey MP, The People’s Pension’s constituency MP Henry Smith, Baroness Diana Warwick (who raised the issue in the House of Lords) and Rob Roberts MP.
Rick Muir highlighted that pension scams are a ‘significantly harmful’ form of fraud, and one of the only forms where you can’t get your money back. This merits a robust policy response. He outlined the need for prevention, more proactive enforcement and the need to share intelligence more effectively.
A need for speed?
During the discussion, Baroness Altmann questioned the need for transfers to proceed quickly: ‘Why is speed a sign of a good pensions company?’ she asked, when so much was at risk. Conversely, all agreed the regulators need to act faster to stop scams. Panellists also discussed the need to build trust with consumers through the use of clear and consistent language, rather than reams of impenetrable technical detail. Mistrust, added Phil Brown, is ‘a complex issue’ and we know that people are, unfortunately, more likely to trust a scammer than their pension provider.
Stephen Timms welcomed our report as offering new ideas and a ‘fresh perspective’ on the problem. He outlined the action he had taken with regard to the Pension Schemes Bill – tabling 4 amendments with the help of the Pension Scams Industry Group, which would override the right to transfer if the scheme could tell it would go into a scam – ticking that prevention box. Unfortunately, the amendments were stripped out at Report stage, but Stephen had ‘received assurances’ from Minister of Pensions Guy Opperman that these powers would be included in the accompanying regulations. In the meantime, the Committee are continuing their inquiry into pension scams, with a view to publishing a report in the new year. Stephen invited roundtable attendees to submit their thoughts and ideas to the inquiry.
Scams wreck lives
Alongside the roundtable event, we commissioned a YouGov survey on the issue, which found that as many as 240,610 adults in the UK may have fallen victim to pension scammers at some point. Based on an average pension pot size of £60,700, we’ve calculated that the total cost could be as high as £14.6 billion.
We know the true scale of the problem is unknown, but these new figures show that some of the estimates of losses are vastly underestimated. Pension scams can wreck lives, and we’re continuing to call for a broader definition of pension fraud, the creation of a central intelligence database and greater powers for pension providers to warn savers.
Scams pledge launched
The Pensions Regulator (TPR) has also been busy, inviting providers, trustees and administrators to sign up to its new scams pledge. Launching the pledge, TPR chief executive Charles Counsell warned that ‘scams thrive in times of economic uncertainty and fear’, calling on providers to establish stronger relationships with savers and a more ‘unified response’ from the industry.
All eyes are now on the House of Lords, as we await the Pension Schemes Bill’s return for its final stages. At the time of writing, there was still no date, as Parliamentary time is currently taken up by a number of urgent Bills. We’ll be following its progress closely, so watch this space…