The Department for Work and Pensions (DWP) has announced new plans to strengthen rules around pension transfers, aiming to protect millions of savers from increasingly sophisticated scams. The proposals target the misuse of Small Self-Administered Schemes (SSAS), which are often exploited by fraudsters to trick individuals into moving their retirement savings into high-risk or bogus investments.
Key proposals to combat pension fraud
Under the proposed measures, transfers into certain pension schemes could be automatically halted when warning signs indicate a risk of fraud. This would allow trustees to stop money from leaving a pension pot before it potentially disappears. Government figures show that victims of SSAS-linked scams lose an average of £38,400 each.
Ministerial statement
Pensions Minister Torsten Bell said: "Pension scams can rip away not just people's savings, but the retirement they are looking forward to. This Government is determined to stay one step ahead of criminals who seek to exploit savers. Too often we see fraudsters trying to trick workers into transferring their savings into bogus pensions. We are stepping in to automatically block transfers where the warning signs are flashing red."
Balancing protection and efficiency
Alongside the crackdown, the DWP is also seeking views on reducing bureaucracy for legitimate pension transfers. Current anti-scam rules can sometimes slow down genuine transactions, and the government aims to streamline the process while maintaining strong safeguards. The consultation follows a review of 2021 regulations that gave pension schemes powers to pause or refuse transfers when scam indicators are identified.
Gaucho Rasmussen, executive director of enforcement at The Pensions Regulator, commented: "Fraud wrecks lives – and tackling it demands strong, coordinated action. Through the Pension Scams Action Group, we are working closely with the DWP, law enforcement, the pensions industry, and other partners to identify emerging threats and stop fraudsters in their tracks."
Broader anti-fraud programme
The proposals are part of a wider government programme to tackle pension fraud. Further measures, including possible new legislation, could follow later this year. The DWP emphasised that pension scams remain one of the most damaging forms of financial fraud, often leaving victims with little prospect of recovering their life savings.
Industry concerns have grown over the exploitation of SSAS arrangements, and the new safeguards are designed to strengthen protections while ensuring that legitimate transfers are not unduly delayed.
