It’s ironic that many pension savers will spend most of their working lives trying to build up a pension pot and then, increasingly, spend a large chunk of their retirement trying to beat off fraudsters, scammers and crooks trying to take it from them.
We were reminded of the threat this week with an appalling pension fraud which saw more than 3,000 pension savers cheated out of a collective £70m in life savings.
Whether much of this money will ever be returned is questionable but the bill paid by the Financial Services Compensation Scheme was huge.
You can read the full details in our story, including about the huge sums the fraudsters spent on luxury lifestyles including top sports cars, exotic holidays and multi-million pound homes. It sounds almost like the script for a Netflix crime series.
The concern is not really the scam itself but the impact on the thousands of victims, many of them pensioners and retired people who could not afford to lose the money. Many would never have recovered mentally or financially from the impact.
The victims were apparently rung at home and offered a so-called ‘pension review’ - a free pension check. What could go wrong? - well everything as they found out.
It looks like a lot of their money was transferred out of their pension schemes to a SIPP to make the whole rotten process work. Money syphoned out of good pension schemes and transferred to bad ones investing in so-called green or eco investments which were just a ruse to rip off pension savers.
I will not dwell too much here on the cynicism and nastiness of the fraudsters in cheating older people out of their pensions but this aspect of the crime I find particularly abhorrent.
Amid all this, while aspects of the fraud were within the regulated sphere (the SIPP for example), other elements were seemingly not. This complex fraud exposes much of the weakness in the regulatory system with only partial regulatory coverage in operation, a factor we have seen time and time again.
My biggest concern is that this could all happen again.
The regulators are trying hard, as are the Serious Fraud Office who deserve praise for their investigation, but the rules on pension withdrawal must be much tighter to beat the scammers and the penalties on firms complicit with the fraud must be stronger.
Kevin O’Donnell is editor of Financial Planning Today and a journalist with 40 years of experience in finance, business and daily news. This topical comment appears most weeks, usually on Fridays but occasionally other days. Email: