The Pensions Regulator (TPR) has launched a new scam-fighting strategy in light of concerns that the cost-of-living crisis may leave savers more vulnerable to scammers.

Amid the rising cost of living and pressures of Covid-19, TPR warned that savers could be lured by offers to access their pension savings early to cover essential household bills or be attracted by fake investments offering high returns that never materialise.

Under the plan, TPR aims to educate the industry and savers on the threat of scams, prevent practices that can harm savers’ retirement outcomes, and fight fraud through the prevention, disruption and punishment of criminals.

The new strategy was confirmed following a joint assessment of the threat from pension scams carried out by TPR and the National Fraud Intelligence Bureau, which found that the threat to pension savings has continued to diversify, both in terms of the overarching methods used to access them and the specific tactics used.

The regulator said that it was primarily, although not solely, concerned with seven kinds of pension scams, which are often seen in combination with one another.

These includes investment fraud, pension liberation, scam pension schemes and providers, clone firms, claims management companies, employer related investment (ERI) breaches, and high fees, often layered through "unnecessarily complex business structures".

As part of the scam-fighting strategy, TPR has also pledged to work to improve the co-ordination of intelligence between scam-fighting partners to better disrupt and prevent fraud and scams and bring scammers to justice.

Indeed, the strategy is expected to complement the work of Project Bloom, which is to be renamed as the Pension Scams Action Group, as previously recommended by the Work and Pensions Committee.

In addition to this, TPR has committed to developing a Pension Scams Action Group strategic threat assessment annually or biennially and exploring the setup of a dedicated Pension Scams Action Group scams hub to co-ordinate intelligence.

The regulator also announced that it will explore opening a “regulatory sandbox” to allow industry to test solutions for scam prevention and intelligence gathering in partnership with other relevant regulators.

Alongside this, a review of the guidance on guidance on member communications for scam-prevention messaging will be undertaken to help improve the pensions consumer journey.

The strategy will build on TPR’s pledge to combat pension scams campaign, which has received support from more than 500 organisations, with an estimated 16 million pension pots now better protected thanks to the campaign according to the regulator.

Commenting on the plans, TPR executive director of frontline regulation, Nicola Parish, commented: “Our new scams combat plan sets out to make savers aware of the risk of scams, encourage schemes to adopt higher standards of protection for savers’ pots and secure the intelligence we need to work with others to pursue and punish criminals.

“But this task is not ours alone. We expect industry to lead the way in thinking of innovative ways to protect savers now and in the future.”

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