A lack of comprehensive data on the number and scale of pension scams places limitations on the industry’s ability to effectively protect savers, the Pensions Policy Institute (PPI) has said.

The institute highlighted the under-reporting of pension scams as a key barrier in effectively gauging scam activity, stating that "only a minority" of scams are actually reported.

It also emphasised that pension scam data is not collected in a comparable or easily-aggregated way across the industry, causing further difficulties for the industry when considering how to protect members.

However, the Pensions Scams Industry Group (PSIG) and Police Foundation recently undertook research into the scale of scam activity affecting pension scheme members in early 2020, which the PPI has said should “shed more light” on the problem.

Previous reports from PSIG, namely its 2018 pilot study of three providers, have echoed this sentiment, revealing that information wasn’t readily available at an organisational level.

PPI senior policy researcher, Lauren Wilkinson, described PSIG's ongoing research as a “step in the right direction” which should allow a greater understanding of the scale of the problem.

She added: “Gaps in data on scams make it difficult to assess the true scale of the impact and nature of scams taking place, and in turn this makes it more difficult for regulators and industry to enact improved procedures for protecting savers.

“Given how much is being lost on average by victims of pension scams, finding a way to better protect savers is vital to improving adequacy of retirement incomes in later life.

“A better understanding of the nature of scams and how many people are being affected will help policymakers and industry to improve this process.”

Industry experts, regulators and government figures have warned of the heightened risk of pension scams amid the Covid-19 crisis and urged savers to be “extra vigilant” in the current circumstances.

Following the PPI's report, Quilter retirement expert, Ian Browne, commented: “Being alert to the risk of pension scams is absolutely critical. The government’s decision to outlaw pension cold-calling sent a clear message to pension savers: if you receive a call out of the blue about your pension, hang up.

“But it has resulted in scammers moving online to target vulnerable people through internet searches, social media and email. Although the authorities take steps to intervene where a scam is identified, they are engaged in a perpetual game of whack-a-mole.

"When they deter cold-call scam tactics, the same fraudsters pop-up online. This is a particular worry for younger savers, who may have been less susceptible to telephone-based scams, but are used to transacting online and may be lured into scams on the web or social media."

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