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£73m of pension savings flagged as scam risk by members

Pension scheme members have identified potential scam activity around transfers worth £73m of savings over the past 12 months.

The consultants XPS Pensions Group produced the figures and say there has been a significant increase in the number of savers who are reporting potential scam activity on pension transfers.

The number of members reporting “red flags” on what could be suspicious activity on pension transfers went from 13 per cent in June 2018 to 34 per cent in June 2019.

A total of £73m of members’ pension savings were flagged as at risk over the past 12 months.

XPS says most cases with a red flag do not turn out to be scams but an increased recognition of warning signs is a positive step forward.

In the last 12 months to 31 May 2019, XPS’s scam identification team have handled 969 member transfer cases, representing transfer values totalling £214m.

It adds talking directly to a member about their transfer increases the likelihood of discovering red flags. Some of the key issues XPS has identified is lack of awareness around fees, confusion around the IFA process and misunderstanding the transfer process.

The ban on pensions cold calling earlier this year, tougher rules to stop scammers opening fraudulent pension schemes and a number of successful criminal convictions have been cited by the pensions industry as key developments in protecting people from pension scams.

Yesterday The Pension Scams Industry Group launched its revised code for combating pension scams for trustees, providers and administrators.

XPS Pensions Group principal Wayne Segars says: “Over the last year we have seen a big increase in the number of warning signs being identified for potential scam activity on pension transfers, from one-in-eight in June 2018 to one-in-three in June 2019.

“Fortunately, not all turn out to be scams but it is good to see an increased understanding of the warning signs. Our scam identification team identified the red flag warnings by speaking directly to members, which is a key part of the data gathering process.”

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