The Pensions Ombudsman's (TPO) pilot Pensions Dishonesty Unit (PDU) has come to an end, after broader government funding constraints meant that funding for the PDU ended on 31 March 2025.

TPO confirmed that whilst the Department for Work and Pensions' (DWP) funding for the unit has now come to an end, run-off funds are available until October 2025 to complete specific investigations.

The ombudsman acknowledged that the threat posed by pensions scams has not gone away, however, stating that it will still ensure that affected customers receive signposting to appropriate reporting avenues, such as The Pensions Regulator (TPR) and Action Fraud, which can limit the impact of wrongdoers and, where possible, hold them to account.

Despite the end of the pilot programme, TPO also said that the ombudsman may, in the future, still decide that a specific case within an occupational scheme may be investigated where there is no prosect of alternative redress, where there is a reasonable likelihood of redress and/or there is a novel legal issue or different type of scam involved.

TPO said it will also point members to potential sources of alternative redress, explaining that it will continue to liaise closely with TPR, independent trustees and the Fraud Compensation Fund (FCF) to ensure that the pensions industry is effectively working together to support members that are victims of pensions dishonesty.

Hailed as a "significant development" for the industry, the unit, which launched in November 2021, investigated allegations of serious breaches of trust, misappropriation of pension funds and dishonest or fraudulent behaviour.

To date, it has issued determinations in relation to 12 pension schemes involving more than 800 members and directed redress of over £40m.

However, TPO stressed that PDU investigations are extremely complex and resource intensive, admitting that, whilst they have been providing justice, it has proven difficult in practice to ensure that scheme members are compensated for losses by the wrongdoers directly.

TPO explained that parties at fault have been able to delay or avoid liability by filing for bankruptcy, or by appealing our determinations, which forces the other parties, notably the affected members, into court proceedings with the ensuing litigation risk and cost.

This means that the actual recoveries to date are "substantially" more modest than the £40n directed.

Pensions ombudsman, Dominic Harris, stated: “I have seen the impact of pensions dishonesty on members who brought us their complaints and I am extremely proud of everything the PDU achieved.

"It made use of our unique and wide powers to hold individuals accountable for the actions of trustees where there have been acts of dishonesty, and it made a real difference to victims by providing them with a voice and shining a light on pension scams.

"It also strengthened TPO’s key partnerships and enhanced intelligence sharing with the likes of TPR, the FCF and enforcement bodies such as Action Fraud.”

This is not the first time that anti-scam efforts have faced funding issues, as the Pension Scams Industry Group also recently raised concerns over its funding, expressing its "disappointment" that the industry is not yet ready to help finance its operations.

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