Gerry Kelly, chief operating officer of Sovereign Group, an international pension provider with offices in Malta, Gibraltar, Isle of Man and Guernsey, is keen to point out that the majority of scams involving pension transfers happen in the UK so limiting transfers to overseas pensions may be seen as unfair.
“It’s like saying ‘you could crash a car by buying it so we won’t sell you a car in the future’. Whereas it’s better to educate people to pass a driving test so they can drive the car.
“There’s probably a bit of a PR exercise that has to happen from the overseas territories and regulators about scams taking place in the UK,” he told IA.
Pension scam crackdown
The UK’s move to limit pension transfers is designed to tackle the increasing number of scams, involving the transfer of retirement savings, reported since the UK introduced pension freedoms in April 2015.
HM Treasury and the Department for Work and Pensions (DWP) estimates that 10% of the 30,000 defined contribution (DC) scheme transferred in 2015/16, are pensions scams and represent £100m ($126m, €119m) of assets.
The proposals include a full-scale ban on all pension cold calling after the government found 8 scam calls every second in the UK, equivalent to 250 million calls per year.
