The number of transfers to small self-administered pension schemes flagged as suspicious has more than doubled at AJ Bell following the launch of the pension freedoms.
There was a 140 per cent increase in 2015 compared with 2014 in SSAS transfer requests caught by the provider’s due diligence process.
AJ Bell says the reforms have been a “shot of adrenaline” for pension scammers with “bigger potential prizes” on offer.
SSASs have long been used for scams, typically using cashback or loan models.
However, some advisers are being frustrated by providers’ reluctance to accept transfers.
Financial Escape managing director Phil Castle is planning to go to the Pensions Ombudsman after Scottish Widows blocked a SSAS transfer because the member does not earn income from the scheme’s sponsor.
A spokeswoman says: “Scottish Widows reviews all pension transfer requests in accordance with its regulatory requirements and duty of care to its customers.
“As part of those checks, when a customer wishes to transfer to an occupational scheme, we will ascertain if the transferee receives remunerative earnings from an employer participating in the scheme.”
But Talbot & Muir head of pensions technical Claire Trott says: “It is not a requirement that they have to have earnt income in order to receive a transfer, many transfers into SSAS occur after the client has technically retired and they are tidying up their pensions.”