In the news
Be aware of pension scams
Pension scams, where people are tricked by scammers into handing over their pension savings, are on the rise. Everyone involved in pensions, including The Pensions Regulator (TPR) and the Financial Conduct Authority (FCA), is working hard to tackle pension scams.
The Trustee and the Scheme Administrator have a duty to look for signs of a pension scam when any transfer is requested. However, you’re also encouraged to take some simple steps to protect yourself from pension scams. Further information is available on the FCA’s website which includes some top tips on how you can protect yourself and what to do if you suspect a scam.
Five common warning signs of a pension scam, according to the FCA, are:
- Offers of a free pension review out of the blue;
- Claims of guaranteed higher investment returns;
- Suggestions that you can release cash from your pension earlier than the minimum retirement age, currently age 55;
- High-pressure sales tactics – scammers may try to pressure you with ‘time-limited offers’, or even send a courier to your door to wait while you sign documents;
- Unusual investments which tend to be unregulated and high risk.
Always remember…if it sounds too good to be true, it probably is!
A helping hand
There are various websites you can visit to find out more about pensions and finances in general, including details of how to get an independent financial adviser.
MoneyHelper joins up money and pensions guidance to make it quicker and easier to find the right help. MoneyHelper brings together the support and services of three government-backed financial guidance providers: the Money Advice Service, the Pensions Advisory Service and Pension Wise.
Help with finding ‘lost’ pensions from previous employers.
Ensures schemes are run properly and protects members against fraud.
Investigates and determines any complaint or dispute of fact or law in relation to a pension scheme.
You can use this register to find an independent financial adviser in your area. Note that you will be responsible for arranging and paying for any advice you receive.
Changes to when you can take your pension
The Normal Minimum Pension Age (NMPA) is the minimum age at which most people can access their pensions without incurring a tax charge. Different rules apply to those accessing their pension early due to ill-health.
The NMPA is currently age 55 but will be increasing to age 57 from 2028.
It's important to note that in some instances members may have a protected pension age of either 50 or 55. This will depend on which section of the Scheme you were in and the date that you left active service. If you'd like to check your minimum pension age you should contact the Scheme using the details in the ‘Making contact’ section.
When can I claim my State Pension?
In November 2018, the State Pension age was 65 for men and women. However, this is gradually increasing and now depends on when you were born. It will reach 67 by 2028.
The State Pension age is going to be kept under review, which means that it could change again in the future, depending on different factors, such as changes in life expectancy.
You can check your State Pension age on the government website.
Pension Tracing Service
There’s an estimated £27 billion in lost pensions in the UK. You may well have built up other pensions during your working life, but have you kept track of those retirement savings? Do you have any ‘lost’ pensions?
The Pension Tracing Service is an impartial service to help locate your lost pensions and then offer advice so you understand what you can do with them. Visit the Pension Tracing Service website today.
Pensions Dashboard update
You may have seen news in the press about the Pensions Dashboard. Its goal is to show individuals all of their pension information online, securely and all in one place including their State Pension.
This is a large and complex project being run by the Money & Pensions Advice Service (MaPs). The Trustee Directors are working with MaPs to ensure all data guidelines associated with the project are adhered to.
The Department of Work and Pensions (DWP) announced in October that testing of the Dashboard should start to take place in the next six months targeting a phased approach with the largest schemes anticipated to go live in 2023, medium sized schemes in 2025 and the smallest schemes in 2026. The current go-live date for the Scheme is 30 November 2023.
DWP also announced that schemes will be given six months’ notice before their go-live date, to give them enough time to be ‘Dashboard ready’.
For more information on the Pensions Dashboard project, please visit the Pensions Dashboard website.
New transfer regulations
At the end of 2021, The Pensions Regulator (TPR) published new regulations that will require the trustees and administrators of pension schemes to, in some cases, do more checks on a transfer, to make sure it’s not a scam.
The regulations, arising from the Pension Schemes Act 2021, introduce a system of red and amber flags, giving trustees the power to refuse transfers where there's a heightened risk it may be part of a scam.
Both the regulations and guidance were drafted with close co-operation between the Department for Work and Pensions (DWP), TPR, the Money and Pensions Service (MaPS) and the Pension Scams Industry Group (PSIG).
Most pension transfers are legitimate and can proceed with minimum intervention. However, PSIG estimates 5% of all transfer requests give trustees and scheme managers cause for concern.
Therefore, new conditions will apply on transfers out of the Scheme and the Trustee may not be allowed by law to proceed with your transfer (or you may be required to take further advice from the government’s MoneyHelper service before the Trustee can implement your transfer request).
A stronger nudge to pensions guidance
New regulations also require the Scheme to offer to arrange Pension Wise appointments for those who apply to transfer any DC benefits.
The new rules mean that the Scheme cannot proceed with the application unless the member has received, and notified them of receipt of, the Pension Wise guidance, or the member opts out of receiving the guidance and provides the Trustee with an opt-out notification.