The UK's Pensions Regulator (TPR) is looking to take the fight to scammers with a new three-pronged scam prevention strategy as surging inflation and the prospect of the UK's energy price cap rising again later this year leaving increasing numbers of Brits financially vulnerable.

Its strategy to combat pension scams will focus on:

  • Educating pension trustees and savers on the threat of scams;
  • Preventing practices which can harm savers' retirement outcomes
  • Fighting fraud through the prevention, disruption and punishment of criminals.

Tom Selby, head of retirement policy at AJ Bell, commented: "The last two years have already been incredibly difficult for millions of people, with Coronavirus and lockdowns taking a massive toll on people's physical and mental wellbeing, including their financial health in some cases. On top of this, the cost-of-living is rising rapidly, with the energy price cap set to surge yet again later this year.

"All of this means millions of Brits face being on or near the financial precipice in 2022. Depressingly, this is a perfect environment for scammers to thrive.

"Unscrupulous fraudsters will attempt to take advantage of vulnerability through any means possible, from offering ‘early access' to pensions to pushing dodgy investments promising sky-high, guaranteed returns. 

He continued: "Offers such as these might be particularly tempting to people experiencing inflation on the brink of double-digits.

"However, the reality is that, unless you are in serious ill-health, accessing your pension early will lead to a huge tax penalty from HMRC, while being lured by the promise of sky-high investment returns from a scammer could see you lose everything. 

"Regulators are right to get on the front foot on this and the vast majority of the pensions industry stands ready to help educate customers about the risks. 

"It is particularly positive TPR is taking steps to improve intelligence sharing and testing new scam prevention solutions. It is vital firms share any concerns they have about schemes, firms or individuals with the relevant authorities, and vice versa, to ensure as many savers as possible are protected."