Govt weighs new SSAS regulations to combat scams

The DWP is seeking suggestions on how it can stop SSASs being used in pension scams. Officials are to examine changes in the way schemes are regulated and what further restrictions could be placed on the opening of new small schemes, in order to thwart scammers.The Government is asking the industry for views on how it can prevent the misuse of SSAS by fraudsters.In a consultation released this week on scams, the Government dedicated a part of the document to “wider action to limit pension scams through small self-administered schemes”.There are around 800,000 registered pension schemes in the UK, the vast majority of which are single member schemes, the Government said.The papers stated: “SSASs exist in order to give small businesses a way to provide cost-effective pensions for their employees. However, very small schemes – particularly those with single members – can be open to abuse because the only person party to all the decisions is the person being scammed.“These scams work by convincing people to set up a SSAS in order to allow a member to “access investments they couldn’t get otherwise” or to “take a personal loan from their pension”.“They often include charging extortionate fees – as high as 20%, and often not disclosed initially – and unregulated investments such as overseas property or natural resources. They can also lead to tax charges of up to 55% on the individual concerned.”“The Pension Regulator’s view is that SSASs are increasingly marketed as ‘products’ offering exotic investments and unrealistic returns, and there is evidence that some consumers have lost their pension savings as a result.“More widely, the lack of regulation around SSASs, and more recent market changes have led some commentators to question whether the government should consider reintroducing pensioneer trustees for SSASs; or their continued usefulness as a pension savings vehicle.”Officials stated: “The Government would welcome views on whether additional steps should be taken to regulate such schemes or what further restrictions could be placed on the opening of new small schemes, in order to limit pension scams.“Are there any further actions that the government should consider to prevent SSASs being used as vehicles for pension scams?”The paper covered other aspects of scamming, such as cold calling, mentioned in Philip Hammond’s Autumn Statement.Anyone wishing to respond must do so by midnight on Monday 13 February 2017. Responses for the consultation should be sent to: This email address is being protected from spambots. You need JavaScript enabled to view it.

Govt weighs new SSAS regulations to combat scams

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