With Brexit looming, people that are saving for retirement through a pension are being increasingly targeted by pension scammers according to the Pension Scams Industry Group's Chairwoman.
At an event organised by XPS Pensions Group, Margaret Snowdon said that savers are being lured into transferring their pension pots into International Self-Invested Personal Pensions (SIPP). She explains that there has been more activity in the area since the news of Brexit because people are worried about the future.
People transferring their pension outside of the UK makes them feel more secure and removes them from the area of uncertainty.
Ms Snowdon does on to say that there is nothing wrong with savers using SIPPs but its usually the vehicle used by the pension scammers.
The Pension Scams Industry Group, formerly the Pensions Liberation Industry Group, is a voluntary board made up of representatives from both the trande and consumer sides, plus administrators, trustees, industry bodies, providers, legal and technical experts.
PSIG have been alerted to personal pension schemes being used for pension scams before, on multiple occasions.
A pilot survey was conducted by PSIG using three providers, Phoenix Life, Standard Life & XPS Pensions Group. This covered more than 27,000 pension transfer requests.
95% of the requests were accounted for by SIPP providers, including international firms.
Granite Financial Planning's Paul Gibson said "Scammers will use any excuse to try and con people
"Transfers to international schemes should raise alarm bells at providers but I am not sure enough is being done to prevent scams.
"Sending out a warning leaflet clearly is not sufficient."
The industry group updated it voluntary code of practice last month. They have now included regulatory changes and emerging scams which have impacted the industry over the past year.
Ms Snowdon said, at the time, "It will take the introduction of legislation to truly end the growing problem of pension scams but in the meantime, our voluntary code provides essential guidance and tools to help trustees and providers identify, and protect their members and themselves from suspicious activity."
The FCA published data in January, victims of pension scams lost an average of £91,000 each to fraudsters in 2017.
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Information in this article has been sourced from: https://www.ftadviser.com/pensions/2019/07/18/pension-scammers-are-taking-advantage-of-brexit-uncertainty/