The Insolvency Service has applied to wind-up 24 companies, connected to 3,750 pension-scam victims, for “pension misuse” since 2015, according to its latest figures.
In a warning published yesterday, 20 January, the Insolvency Service told people to safeguard their pensions from investment scammers and negligent trustees, estimating that the total amount of contributions made by the victims could be £202m.
In August, The Pensions Regulator (TPR) and the Financial Conduct Authority (FCA) joined forces to launch a campaign urging people to be aware of scammers targeting their pension savings, as it was revealed an average £91,000 was lost per victim in 2017.
Consumer Minister Kelly Tolhurst said: “Our consumer protection regime is one of the strongest in the world and we are committed to making sure people know their rights. If you are approached to make an investment from your pension, always do your homework and seek independent advice, if necessary, to help you make an informed decision.
“Government continues to work closely with the Insolvency Service who are working to clamp down on rogue companies targeting vulnerable people.”
Earlier this month, a ban on pensions cold calling came into effect, making it illegal for any member of the public to receive unsolicited calls about their pension.
The Insolvency Service highlighted cases including where four directors were involved in the misuse of pension funds of £57m, and subsequently band for 34 years.
In another case, Fast Pensions and five connected firms were wound up in May 2018, after 520 people were encouraged to transfer their pension savings into schemes where Fast Pensions was acting as the sponsoring employer.
The investigation found that £21m was transferred through various methods, including cold calls or through free pension reviews, where the advice was found to be inadequate.
AJ Bell senior analyst, Tom Selby, believs the figures to be the “tip of the iceberg”.
“Some victims will be unaware they have been duped for months or even years, while others will simply be too ashamed to come forward and report what has happened. Furthermore, it can take a long time for authorities – which are always limited by resource - to build a case against firms involved in scam activity,” he said.
“The government has made a start in tackling pension fraud by banning cold-calling. However, these latest figures are just another reminder of the tragic cost of retirement scams, and the protection of savers must remain front-and-centre for policymakers both in Whitehall and at regulators.”
The number of people visiting the ScamSmart website increased from 31,000 in the 55 days prior to the launch of the campaign to 173,000 in the 55 days after.
Tolhurst urged those who believe they are victims to report it to Action Fraud UK at the earliest opportunity, or visit the ScamSmart website for further help.
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