Torsten Bell: While we recognise that SSASs make up only a very small minority of the pensions market, emerging evidence suggests that SSASs may be more vulnerable to the potential for fraudulent misuse
The Department for Work and Pensions has launched a consultation setting out targeted measures to address the risk of fraud within small self-administered schemes (SSASs).
The DWP said the consultation on proposed amendments to the Occupational and Personal Pension Schemes (Conditions for Transfers) Regulations 2021 will ask for feedback on changes to introduce a new red flag where a transfer is proposed and the evidence provided does not demonstrate an employment link with the receiving occupational pension scheme – a move it hopes will address emerging SSAS concern.
It said these proposals marked the first stage in a broader programme of work relating to pension scams and pension transfers.
Minister for pensions Torsten Bell said the loss of pension savings, whether through decisions made under pressure or through explicit fraud, can be "financially and emotionally devastating".
He noted that data from Report Fraud showed the impact pension fraud has on victims – noting the average financial loss in 2024 to 2025 was £18,400, and where an investment was identified as the primary vehicle for pension fraud, as is commonly observed in case studies relating to SSASs, the average loss per victim increases to £38,400.
Bell said: "The scale of the impact of pensions fraud lay behind the introduction of the Occupational and Personal Pension Schemes (Conditions for Transfers) Regulations 2021. This has delivered stronger safeguards. But there is more to do, as levels of defined contribution (DC) savings grow and the pensions landscape continues to evolve, increasing pot sizes make pension savings a more attractive target for scammers.
"Fraudsters are adapting their tactics accordingly, and government must stay one step ahead to ensure robust protection for pension savers and take decisive action against fraud wherever it occurs."
Bell added: "While we recognise that SSASs make up only a very small minority of the pensions market, emerging evidence suggests that SSASs may be more vulnerable to the potential for fraudulent misuse. We are therefore acting to update safeguards against such fraud. This government will not tolerate pension fraud, and I remain steadfast in my commitment to protecting pension savers and pursuing those who seek to exploit them."
The DWP consultation period begins today (9 June) and will run until 21 July.
WBR Group director of SSAS transformation and proposition Caitlin Southall commented: "The attention from the government on SSAS transfer regulations are promising, showing a positive step towards better regulation in the SSAS market and therefore better outcomes for consumers. We have long been advocates for SSAS, and the great advantages that it can bring for clients, however there are still some lingering bad actors in the SSAS arena that need to be removed. This is a pleasing step towards that outcome.
However, in our opinion the new rules don't go far enough and as ever with these things, the devil is in the detail. The lack of an employment link is a great reason to "red flag" a transfer except where the SSAS members are directors and therefore don't draw PAYE, this is likely to be a significant number of SSASs.
"There are a number of alternatives to check a member's employment link with a company to determine a strong case based on a balance of probabilities. It's important to balance the need to be diligent against fraud with not unnecessarily delaying legitimate transfers."
This article first appeared on PA's sister title Professional Pensions
