Pension scammers are the lowest of the low, stealing people’s hard-earned savings and ruining the lives of people who have worked hard for decades to get the retirement they want.

These callous crooks are always changing their tactics and, after the government introduced the cold calling ban in 2019, many moved the goal posts to ensure their nefarious schemes were tricky for even the savviest to spot.

Fraudsters now prefer to use more sophisticated online scams, contacting victims through social media and promising a too-good-to-be-true return on investment – often boasting returns that are 7-8 per cent higher than normal.

This type of unscrupulous behaviour hasn’t gone away during the pandemic either – where there’s a crisis, there are also those who try to take advantage. Figures for January to August 2020 show that £1.22m in pensions assets was stolen due to cloned websites, contributing to a total of £78m lost in the entire year.

Making sure people have the retirement they want is my focus and it’s vital, with many of us turning to online services and engaging with the digital marketplace, that savers have the right tools to engage with companies online and protect themselves from the criminals trying to steal their savings.

That’s why, to mark Citizens Advice’s Scam Awareness Campaign 2021, I’m highlighting the major action that we at the Department for Work and Pensions (DWP) are taking to fight against pension scams.

DWP protection and prevention measures

In February, the landmark Pension Schemes Act received Royal Assent. The Act enhances the powers of The Pensions Regulator, giving them the means to issue civil penalties of up to £1 million, alongside three new criminal offences, to punish those who wilfully or recklessly plunder people’s pension pots to line their own pockets.

Throughout the year, I’ve conducted several meetings with Google and other internet giants urging them to use their existing powers to stop online scammers using their sites to promote fake adverts.

And last month in May saw the announcement of our new pension transfer rules which give new powers to pension scheme trustees and scheme managers to act as the first line of defence against online fraud or a possible scam.

Under the new regulations, suspicious requests to transfer could be stopped if pension savers have been approached, uninvited via social media.

Such unsolicited contact would trigger a "red flag" which would mean pension trustees or scheme managers can block it.

The presence of these flags could be determined based on the individual’s response to a range of standard questions, including but not limited to: how they were approached - was it online and out of the blue, do they know who it is that is contacting them, and are they being contacted by a firm outside the UK.

This system will provide that extra level of protection for savers, before they make a transfer that they may later regret.

It’s important that we gather views from industry and the public on the new regulations and their application. With the growth in recent years of online scams we must act now to curb them, and we are looking forward to the considered opinions of the pensions industry and savers alike.

Protect yourself online

There are many ways scammers might try and contact people to get their hard-earned savings, and even the savviest among us could fall victim to these sophisticated scams.

That’s why I regularly share my five top tips on how to avoid pension scams:

1. Be wary of offers found online: Some adverts hosted by tech giants can be fake or link to dodgy offers.

2. Scammers often approach unannounced: If you receive a phone call, email, are approached on social media through comments or direct message, text, letter or even on your doorstep then proceed with extreme caution.

3. Offers of a ‘free pension review’: If someone appears out of the blue, and offers a ‘free pension review’, be wary. Offers or mentions of ‘one-off investments’, time-limited offers, upfront cash incentives, ‘free pension reviews’, ‘legal loopholes’, ‘early access’ or 'government initiatives' are all pension scam warning signs. If you are feeling rushed to make a decision, take a moment to ask yourself if this is a legitimate offer, and bear in mind that no legitimate fund would pressure you into saving with them.

4. Incredible returns on investment: If you receive an offer of unbelievable returns (typically 7 per cent or 8 per cent or higher), but only if you transfer immediately, this should set alarm bells ringing.

5. Report anything suspicious: If you think you’ve been the victim of a scam you should report it to Action Fraud at www.actionfraud.police.uk.

We have further to go in the fight against fraud, and I am using my time as Pensions Minister to make sure that the strides we take towards curtailing these shameless criminals are effective, robust and protect our pensions.

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