Have your say on stronger pension fraud protections
Fraud wrecks lives. As pension scams evolve, so must our response. The Department for Work and Pensions (DWP) proposes to strengthen protections and streamline transfers. In this blog Gaucho Rasmussen, Executive Director, Enforcement and Legal Group, talks about the role the Pension Scams Action Group (PSAG) is playing and urges the industry to respond to the DWP’s consultation.
Being a victim of pension fraud can mean losing a lifetime of savings in weeks. Research by Report Fraud shows that the average loss per victim was £18,400 in 2024–25, rising to £38,400 where an investment scam was involved.
And every loss is personal: retirement plans are wrecked, opportunities ended, and lives are lived in anxiety at a time of life when people should be able to relax and enjoy their later years.
Giving trustees the power to stop suspicious transfers is protecting thousands of savers. But scammers are evolving and so must we.
A co-ordinated, intelligence-led response
Tackling fraud demands strong, co-ordinated action. That is why PSAG, led by The Pensions Regulator (TPR), is working closely with the DWP, Home Office, law enforcement, the pensions industry and others to identify emerging threats and stop fraudsters in their tracks.
Our action is intelligence-led. We identified Small Self-Administered Schemes (SSAS) as a growing area of fraud risk.
The vast majority of SSASs are legitimate enterprises, covering around 60,000 savers across 21,000 schemes. Legitimate SSASs tend to be used by small family businesses, with members being the directors, senior employees and other family members, all of whom are the trustees of the scheme.
However, fraudsters are able to exploit the lower regulatory requirements for these schemes and mislead savers into transferring into sham arrangements. Our evidence suggests up to 1 in 10 transfers into SSASs may involve fraud. And this figure is likely under-reported.
Working with our PSAG partners, including the National Economic Crime Centre and industry representatives, we took a detailed look at the fraud risk and identified options to better protect the people saving into SSASs.
Targeted changes to strengthen and simplify
The consultation features proposals to make it harder for fraud to progress. This includes a new red flag where a member cannot demonstrate a verifiable employment link to a receiving scheme.
It also suggests ways to improve the transfer system between legitimate schemes:
- a ‘green list’ of trusted, low-risk destination schemes
- removal of the overseas investment amber flag, where other safeguards already apply
- a 12-month exemption from repeat MoneyHelper guidance appointments
We see these as important steps in the fight against pension fraud, part of a wider, ongoing government programme aligned with the UK fraud strategy.
The proposals would give trustees clearer tools to act decisively where risk is present. And, we hope, would give peace of mind to people transferring into a new scheme.
At the same time, the measures aim to make transfers simpler and more efficient, addressing operational challenges raised by trustees and administrators without weakening protections.
We support these measures because they would close a gap in the current transfer framework, help trustees identify legitimate receiving schemes, and strengthen industry-wide efforts through PSAG to combat fraud.
We view this consultation as an important step forward, but the government needs to hear from trustees and industry professionals, who will be responsible for administering changes to make sure they are as efficient and effective as possible.
Trustees: the first line of defence
Trustees and administrators are the first line of defence against fraudsters. In many cases, they are the last safeguard before a saver’s money is lost.
So, it is vital that trustees:
- stay alert to evolving scam tactics
- challenge unusual or high-risk transfers
- maintain clear, robust processes
- keep up to date with our code, guidance, tools and alerts
While the consultation is ongoing, pension transfers should not be delayed unnecessarily, but nor should protections be weakened. Trustees should act promptly where schemes are clearly safe, while maintaining strong controls to identify and prevent scams.
A shared responsibility
Millions of people rely on pensions for their future. Protecting those savings is a shared responsibility.
By staying vigilant, working together and engaging with these reforms, we can stay ahead of fraudsters and deliver better outcomes for savers. Now is the time to act and we want to hear what you think.
This consultation is your opportunity to shape this next phase of protection, and we want trustees, providers and administrators to have their say.
Respond by 21 July to the DWP consultation.
Gaucho Rasmussen
Executive Director, Enforcement and Legal Group
