Pensions minister Baroness Ros Altmann says the Government will not legislate to stop pension scams as providers face renewed pressure to transfer savings to suspected liberation schemes following a controversial High Court ruling.
Last month the High Court overturned a Pensions Ombudsman decision that sided with Royal London over a suspicious £8,000 transfer to a SSAS in 2014.
Lawyers warned the ruling could open the floodgates as scammers and savers use the verdict as proof their transfer requests should be approved.
Now Aegon and AJ Bell report they are dealing with a fresh wave of enquiries.
AJ Bell technical resources manager Gareth James says: “There is a danger that pension fraudsters are exploiting the relative ease with which SSASs can be established to con people out of their hard earned savings.
“As a minimum, we’d like to see the requirement for all SSASs to have a professional trustee to be reinstated, which would make things significantly harder for fraudsters. We’d also like to see a change in the law around the statutory right to transfer so that it gives the transferring scheme the power to resist transfers where there is a clear risk of client detriment.”
But speaking to Money Marketing, Altmann says there is a limit to what the Government can do.
She says: “We are looking at how we protect consumers, there are lots of things going on to make sure we’re on top of it but you’ll never stop fools being parted with their money, you’ll never stop people trying to part others from their money.
“I’ve looked into making it illegal to cold-call someone about a pension but I don’t believe we can do that.”
Plutus Wealth Management chartered financial planner Sebastian Hurst says: “We need to build a financial services industry that protects the customer. A lot of the time transfers out of occupational schemes risk giving up guarantees or low charges.
“The vast majority of advisers are doing the right thing but there will always be people circumventing that so a second pair of eyes from the provider is welcome. I’m not happy the High Court ruled against Royal London, pensions are such an important asset for clients.”