Ombudsman services are bracing themselves to be inundated with complaints as a result of Covid-19, MPs have heard.
Anthony Arter, who is the Pensions Ombudsman and Pension Protection Fund Ombudsman, said the financial strain people are currently under could lead to approaches from fraudsters offering to “help” them release their pension cash.
Some employers may also be tempted not to pay pension contributions into schemes, he warned.
Mr Arter, who is chairman of the Ombudsman Association, told the Work and Pensions Committee: “I had a meeting about a month ago with other public sector ombudsmen.
“And everyone is agreed that public sector ombudsmen will be inundated with complaints as a result of Covid.
Weâve joined forces with @DWP @TPRgovuk @MoneyPensionsUK @FSCS @TheFCA and @PensionsOmbuds to reassure pension savers about the services and valuable protection in place for their pensions. #scamsmart #pensions #COVID-19 https://t.co/bjLRYoyYXJ pic.twitter.com/6avHU2OUvj— Pension Protection Fund (@PPF) May 27, 2020
“I don’t think pensions will be any exception to that. If you look at the financial strain that people are going to be suffering, going forward, and they’ve got a pot of money there in their pension scheme, the big concern is the fraudsters coming in to say: ‘We can help you get that money’.
“You’ve got perhaps people under 55 and those fraudsters will be saying: ‘We can help you release that money,’ and of course they can’t.
“I can see that happening, I can see an increase. Not straight away, with these things it’s always delayed action.
“We probably won’t see those complaints coming through maybe for 12 months, maybe my successor will have that. Maybe less, I don’t know.
“There’s no increase right at this moment, but I think that will happen.”
He continued: “I also think there will be those employers who will take the money, the contributions… and not pay them across into pension schemes.
“I’m convinced that will happen, almost certainly.”
Mr Arter added: “Undoubtedly there will be an increase in the number of complaints.”
Commenting after the committee hearing, Helen Morrissey, pension specialist at Royal London, said: “The Pensions Ombudsman is right to be worried. Scammers are known to work at lightning speed and evolve their methods to exploit people’s fears.
“They may well take advantage of people’s concerns about a drop in their pension value or a potential loss of income to try and separate people from their pensions.
“The key thing to remember is that if something sounds too good to be true then it probably is and you should be wary.
“Anyone offering you a free pension review or saying you can access your pension before the age of 55 is likely a scammer.
“Similarly, anyone pressuring you to make a quick decision to transfer money into high-performing investments should be treated with caution. Do not be scared to put the phone down on someone or cut off contact with them and report any suspicious activity to Action Fraud.”