Asked by: Adam Jogee (Labour - Newcastle-under-Lyme)
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, what recent steps has he taken to help tackle fraud in the pension system.
Answered by Torsten Bell - Parliamentary Secretary (HM Treasury)
The Government is resolute in its determination to protect pension scheme members from financial harm. There is a strong regulatory framework which allows pension scheme trustees to block pension transfers if there is risk of a scam and we are developing extended measures which seek to strengthen protections and combat any areas of evolving risk. DWP will continue to work closely with partners, including the police, the National Economic Crime Centre and anti-scams industry groups, to identify and disrupt unlawful activity and to ensure appropriate enforcement action is taken against those who exploit or seek to exploit pension savers. We will publicly consult on our work to strengthen the transfer process with enhanced protections in the coming months.
Asked by: James McMurdock (Independent - South Basildon and East Thurrock)
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, what assessment he has made of the relationship between levels of pension financial literacy and vulnerability to pension fraud.
Answered by Torsten Bell - Parliamentary Secretary (HM Treasury)
In 2023, the Behavioural Insights Team within the Money and Pensions Service (MaPS) conducted a scams evidence review which found that victims of pension fraud do not fall into easily defined demographic groups and that anyone can be targeted. To mitigate this, a range of measures are in place to raise awareness and reduce risk. These include the Financial Conduct Authority’s ScamSmart tool which highlights areas of potential risk, and the detailed guidance provided by MaPS through MoneyHelper, which offers practical steps to identify and avoid pension scams. Additional safeguards are provided by the pension transfer regulations which empower trustees to pause or refuse a transfer where there are indicators of potential scam activity.
Asked by: James McMurdock (Independent - South Basildon and East Thurrock)
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, what steps he is taking to help people understand the risks associated with pension transfers.
Answered by Torsten Bell - Parliamentary Secretary (HM Treasury)
Pension transfer regulations require trustees and scheme managers to carry out due diligence before processing a transfer request. Where a potential risk of a scam is identified, the transfer may be stopped. In cases where there are risk indicators but the transfer could still be genuine, the member must receive mandatory guidance from MoneyHelper before the transfer can proceed. In these cases, members must attend an appointment with the Money and Pensions Service, which helps them recognise scams, assess risks, and make an informed decision before proceeding. Additional resources are available through the Financial Conduct Authority’s ScamSmart tool and its Pension Scams Consumer Guide, offering practical advice on spotting warning signs, verifying investments, and reporting suspected scams.
Asked by: Peter Bedford (Conservative - Mid Leicestershire)
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, what assessment her Department has made of the adequacy of mechanisms for transferring pensions.
Answered by Torsten Bell - Parliamentary Secretary (HM Treasury)
The Occupational and Personal Pension Schemes (Conditions for Transfers) Regulations 2021 were introduced to protect pension savers against the threat of scams by enabling trustees to pause or halt a transfer in certain circumstances.
DWP conducted a year long review of the regulations in 2022, as agreed with the Work and Pensions Select Committee.
The review concluded that the measures had been largely successful in delivering the policy intent, approximately 2000 potentially fraudulent transfers were blocked during the period considered and industry participants confirmed that there remained an ongoing need for the enhanced protection the regulations provide.
However, whilst feedback concerning the protections was positive, findings of the review also suggested that the practical application of some parts of the regulations may have caused administrative issues in certain areas.
DWP officials are conducting work with other government departments and industry representatives to consider if changes could be made to improve the transfer process whilst ensuring that appropriate protections remain in place.
Asked by: Ian Roome (Liberal Democrat - North Devon)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps her Department is taking to ensure consumers are aware of rights regarding personal financial products.
Answered by Emma Reynolds - Secretary of State for Environment, Food and Rural Affairs
The Department of Business and Trade provides funding to Citizens Advice and Citizens Advice Scotland to deliver advice to consumers, including on debt and money matters. In addition, the Consumer Protection Partnership delivers an annual scams awareness campaign. Last year’s campaign focused on financial scams: fake debt advice; friend in need scams; pension scams; investment scams; and parking QR Codes.
The Financial Conduct Authority (FCA) sets standards for consumer protection for regulated financial services products, and holds to account any firms that don’t meet those standards. The FCA’s Consumer Duty sets high standards of consumer protection across financial services, and includes a principle requiring firms to act to deliver good outcomes for customers. Good outcomes include consumers being given the information they need, at the right time, and presented in a way they can understand.
Additionally, the Money and Pensions Service (MaPS) is supported by the Government to provide comprehensive guidance for each stage of consumers’ financial lives. Its MoneyHelper website offers a range of tools to support consumers with money matters, including information on everyday financial products and letter templates to help consumers raise complaints with their providers.
Asked by: Anna Gelderd (Labour - South East Cornwall)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps her Department is taking with the Financial Conduct Authority to (a) investigate and (b) address (i) fraudulent activity linked to Qualified Recognised Overseas Pension Schemes and (ii) the financial impact on UK citizens.
Answered by Emma Reynolds - Secretary of State for Environment, Food and Rural Affairs
A qualifying recognised overseas pension scheme (QROPS) is the name for any pension scheme located outside the UK which meets the criteria to receive transfers of UK tax relieved pension savings. Where the overseas pension scheme has broadly similar tax characteristics to a UK registered pension scheme. QROPS are pension schemes, not products.
Although QROPS can receive UK tax relieved pension savings, this does not mean that the UK has a right to regulate pension schemes in other countries. However, those overseas schemes are required to be regulated by a pensions regulator in the overseas country where they are established in order for them to receive UK tax relieved pensions. HMRC does not impose restrictions on assets a QROPS can invest in that is for the overseas regulator.
There are no plans to make HMRC, or the Pensions Regulator (TPR), or the Financial Conduct Authority (FCA), regulate QROPS. That would not be appropriate because the UK does not have jurisdiction over overseas pension schemes. HMRC’s primary role is to protect UK tax relief that have been given. HMRC can remove the QROPS status from pension schemes when it is not appropriate for the scheme to continue to be able to receive UK tax relieved pension savings. There are also no plans to introduce an investigation unit into QROPS or review the regulatory framework.
In the UK individuals are free to transfer their pension savings but must get financial advice for larger amounts. The QROPS rules allow individuals to move abroad to live or work to take their pension savings with them. HMRC makes clear that individuals should seek suitable professional advice, including from a regulated financial adviser, when transferring pension savings to a QROPS. A transfer to a QROPS is covered by the requirement to take regulated financial advice if transferring more than £30,000 from a Defined Benefit scheme.
Additionally, pension scheme administrators are responsible for carrying out due diligence on transfers to other pension schemes. They are also responsible for complying with the requirements of TPR and the FCA.
HMRC, TPR and the FCA are part of the Pension Scams Action Group (PSAG) - a multi-agency taskforce of law enforcement, Government and industry working together to tackle pension fraud.
Asked by: Anna Gelderd (Labour - South East Cornwall)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what estimate she has made of the tax gap associated with pension fraud linked to QROPS; and what steps she has taken to prevent further losses.
Answered by Emma Reynolds - Secretary of State for Environment, Food and Rural Affairs
A qualifying recognised overseas pension scheme (QROPS) is the name for any pension scheme located outside the UK which meets the criteria to receive transfers of UK tax relieved pension savings. Where the overseas pension scheme has broadly similar tax characteristics to a UK registered pension scheme. QROPS are pension schemes, not products.
Although QROPS can receive UK tax relieved pension savings, this does not mean that the UK has a right to regulate pension schemes in other countries. However, those overseas schemes are required to be regulated by a pensions regulator in the overseas country where they are established in order for them to receive UK tax relieved pensions. HMRC does not impose restrictions on assets a QROPS can invest in that is for the overseas regulator.
There are no plans to make HMRC, or the Pensions Regulator (TPR), or the Financial Conduct Authority (FCA), regulate QROPS. That would not be appropriate because the UK does not have jurisdiction over overseas pension schemes. HMRC’s primary role is to protect UK tax relief that have been given. HMRC can remove the QROPS status from pension schemes when it is not appropriate for the scheme to continue to be able to receive UK tax relieved pension savings. There are also no plans to introduce an investigation unit into QROPS or review the regulatory framework.
In the UK individuals are free to transfer their pension savings but must get financial advice for larger amounts. The QROPS rules allow individuals to move abroad to live or work to take their pension savings with them. HMRC makes clear that individuals should seek suitable professional advice, including from a regulated financial adviser, when transferring pension savings to a QROPS. A transfer to a QROPS is covered by the requirement to take regulated financial advice if transferring more than £30,000 from a Defined Benefit scheme.
Additionally, pension scheme administrators are responsible for carrying out due diligence on transfers to other pension schemes. They are also responsible for complying with the requirements of TPR and the FCA.
HMRC, TPR and the FCA are part of the Pension Scams Action Group (PSAG) - a multi-agency taskforce of law enforcement, Government and industry working together to tackle pension fraud.
Asked by: Anna Gelderd (Labour - South East Cornwall)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if she will establish a QROPS investigation unit to examine cases of pension fraud and regulatory failings.
Answered by Emma Reynolds - Secretary of State for Environment, Food and Rural Affairs
A qualifying recognised overseas pension scheme (QROPS) is the name for any pension scheme located outside the UK which meets the criteria to receive transfers of UK tax relieved pension savings. Where the overseas pension scheme has broadly similar tax characteristics to a UK registered pension scheme. QROPS are pension schemes, not products.
Although QROPS can receive UK tax relieved pension savings, this does not mean that the UK has a right to regulate pension schemes in other countries. However, those overseas schemes are required to be regulated by a pensions regulator in the overseas country where they are established in order for them to receive UK tax relieved pensions. HMRC does not impose restrictions on assets a QROPS can invest in that is for the overseas regulator.
There are no plans to make HMRC, or the Pensions Regulator (TPR), or the Financial Conduct Authority (FCA), regulate QROPS. That would not be appropriate because the UK does not have jurisdiction over overseas pension schemes. HMRC’s primary role is to protect UK tax relief that have been given. HMRC can remove the QROPS status from pension schemes when it is not appropriate for the scheme to continue to be able to receive UK tax relieved pension savings. There are also no plans to introduce an investigation unit into QROPS or review the regulatory framework.
In the UK individuals are free to transfer their pension savings but must get financial advice for larger amounts. The QROPS rules allow individuals to move abroad to live or work to take their pension savings with them. HMRC makes clear that individuals should seek suitable professional advice, including from a regulated financial adviser, when transferring pension savings to a QROPS. A transfer to a QROPS is covered by the requirement to take regulated financial advice if transferring more than £30,000 from a Defined Benefit scheme.
Additionally, pension scheme administrators are responsible for carrying out due diligence on transfers to other pension schemes. They are also responsible for complying with the requirements of TPR and the FCA.
HMRC, TPR and the FCA are part of the Pension Scams Action Group (PSAG) - a multi-agency taskforce of law enforcement, Government and industry working together to tackle pension fraud.
Asked by: Anna Gelderd (Labour - South East Cornwall)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps HMRC is taking to (a) engage with victims of pension fraud linked to QROPS and (b) ensure that concerns about regulatory oversight are addressed.
Answered by Emma Reynolds - Secretary of State for Environment, Food and Rural Affairs
A qualifying recognised overseas pension scheme (QROPS) is the name for any pension scheme located outside the UK which meets the criteria to receive transfers of UK tax relieved pension savings. Where the overseas pension scheme has broadly similar tax characteristics to a UK registered pension scheme. QROPS are pension schemes, not products.
Although QROPS can receive UK tax relieved pension savings, this does not mean that the UK has a right to regulate pension schemes in other countries. However, those overseas schemes are required to be regulated by a pensions regulator in the overseas country where they are established in order for them to receive UK tax relieved pensions. HMRC does not impose restrictions on assets a QROPS can invest in that is for the overseas regulator.
There are no plans to make HMRC, or the Pensions Regulator (TPR), or the Financial Conduct Authority (FCA), regulate QROPS. That would not be appropriate because the UK does not have jurisdiction over overseas pension schemes. HMRC’s primary role is to protect UK tax relief that have been given. HMRC can remove the QROPS status from pension schemes when it is not appropriate for the scheme to continue to be able to receive UK tax relieved pension savings. There are also no plans to introduce an investigation unit into QROPS or review the regulatory framework.
In the UK individuals are free to transfer their pension savings but must get financial advice for larger amounts. The QROPS rules allow individuals to move abroad to live or work to take their pension savings with them. HMRC makes clear that individuals should seek suitable professional advice, including from a regulated financial adviser, when transferring pension savings to a QROPS. A transfer to a QROPS is covered by the requirement to take regulated financial advice if transferring more than £30,000 from a Defined Benefit scheme.
Additionally, pension scheme administrators are responsible for carrying out due diligence on transfers to other pension schemes. They are also responsible for complying with the requirements of TPR and the FCA.
HMRC, TPR and the FCA are part of the Pension Scams Action Group (PSAG) - a multi-agency taskforce of law enforcement, Government and industry working together to tackle pension fraud.
Asked by: Anna Gelderd (Labour - South East Cornwall)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what discussions her Department has had with HMRC on the regulation and oversight of QROPS to ensure consumer protection.
Answered by Emma Reynolds - Secretary of State for Environment, Food and Rural Affairs
A qualifying recognised overseas pension scheme (QROPS) is the name for any pension scheme located outside the UK which meets the criteria to receive transfers of UK tax relieved pension savings. Where the overseas pension scheme has broadly similar tax characteristics to a UK registered pension scheme. QROPS are pension schemes, not products.
Although QROPS can receive UK tax relieved pension savings, this does not mean that the UK has a right to regulate pension schemes in other countries. However, those overseas schemes are required to be regulated by a pensions regulator in the overseas country where they are established in order for them to receive UK tax relieved pensions. HMRC does not impose restrictions on assets a QROPS can invest in that is for the overseas regulator.
There are no plans to make HMRC, or the Pensions Regulator (TPR), or the Financial Conduct Authority (FCA), regulate QROPS. That would not be appropriate because the UK does not have jurisdiction over overseas pension schemes. HMRC’s primary role is to protect UK tax relief that have been given. HMRC can remove the QROPS status from pension schemes when it is not appropriate for the scheme to continue to be able to receive UK tax relieved pension savings. There are also no plans to introduce an investigation unit into QROPS or review the regulatory framework.
In the UK individuals are free to transfer their pension savings but must get financial advice for larger amounts. The QROPS rules allow individuals to move abroad to live or work to take their pension savings with them. HMRC makes clear that individuals should seek suitable professional advice, including from a regulated financial adviser, when transferring pension savings to a QROPS. A transfer to a QROPS is covered by the requirement to take regulated financial advice if transferring more than £30,000 from a Defined Benefit scheme.
Additionally, pension scheme administrators are responsible for carrying out due diligence on transfers to other pension schemes. They are also responsible for complying with the requirements of TPR and the FCA.
HMRC, TPR and the FCA are part of the Pension Scams Action Group (PSAG) - a multi-agency taskforce of law enforcement, Government and industry working together to tackle pension fraud.