Time to keep your pensions promise, Boris! PM pledged to help victims

Boris Johnson vowed to help victims of the £10 billion Government-sanctioned pension scams four years ago, Money Mail can today reveal — but as of yet his promises have proved empty.

After meeting workers fleeced of their futures in the scandal, the now Prime Minister pledged to take up their case to find out why HMRC had ‘approved’ rogue retirement schemes.

But victims say they did not hear from him again — despite attempts to arrange further meetings — and years on they are no closer to getting justice. 

The revelation comes after the Mail last week revealed how tens of thousands of workers lost their retirement savings in the almost decade-long scam.

Army veterans, police officers, firemen, ambulance staff, care workers and teachers were among those who agreed to transfer their nest eggs to the rogue schemes because they were enrolled with HMRC and the Pensions Regulator — making them appear above board.

Employers including the Ministry of Defence, the NHS and the Royal Mail also approved the transfers because the schemes were officially registered. 

But a 2006 government rule change aimed at bringing ‘security, dignity and comfort in old age’ meant scammers could enrol pension schemes with HMRC online in minutes — and with virtually no checks — in what MPs described as a ‘scammers’ paradise’.

In a second blow, some victims also face hefty fines because many of the bogus schemes broke tax laws and are being targeted with big bills by HMRC even though it approved the schemes in the first place.

The Mail can also reveal a string of other blunders surrounding pension schemes that caused untold misery to thousands of families, including how:

• HMRC kept pension schemes on its register for months after launching a criminal investigation into fraudsters administering them — during which time more than 100 victims unwittingly moved their savings into them.
• Tax officials privately raised concerns and started looking into the legality one of the first major pension scams but took no action for months while 300 more people signed up and lost millions.
• Government departments and private companies approved transfers of staff pension pots to scam schemes for years despite explicit warnings to be ‘vigilant’ from the regulator.
• A policeman fleeced out of his pension by an HMRC- registered scam said he faced a ‘nightmare’ trying to get anyone to investigate the fraud. 

When newly elected as MP for Uxbridge, Mr Johnson spent 45 minutes with workers who lost all their retirement savings in the HMRC- registered Ark scheme, where almost 500 people lost £25 million.

The rogue pension scheme was later ruled by a judge to be illegal and a ‘fraud on the trustees’ powers’.

The meeting was arranged by his constituent David Burgess, who lost his £38,000 pension to Ark after trusting it because it was registered with HMRC and the Pensions Regulator.

Forced to live in separate countries after £70k loss 

Robert Allum emigrated to Portugal with his wife Fiona

A couple who have been together for 30 years have been forced to live in separate countries after losing £70,000 in a pension scam.

Robert Allum emigrated to Portugal with his wife, Fiona, a decade ago to escape London after she was diagnosed with a serious lung disease.

But Robert, 65, had to return to the UK to take a new job after he lost almost everything when his cash was swallowed up by ‘commissions and fees paying for bad investments’.

Robert, who has two sons and four grandchildren, was a council property inspector in London before moving abroad.

He was cold-called by an introducer from Continental Wealth Management (CWM) soon after arriving in Portugal, where the couple planned to start a small farm.

He says: ‘They appeared to be completely professional. They were financial advisers, they had Momentum Malta Retirement Trust as trustees and pension managers, which is listed by HMRC, and the money was to be invested through an established investment firm.’ 

But the statement in his second year showed his £85,000 funds were falling. Eventually, he discovered the firm had gone out of business.

He had just £13,000 left — and he had to pay £3,000 in exit fees.

Robert, who lives in Forest Gate, East London, is now one of more than 50 people taking Momentum to the Maltese financial arbiter.

Momentum says all investment costs were fully disclosed and authorised and verified by the pension members and their advisers. It also says it took action as soon as it discovered the problems with CWM.

Two months after the October 2015 meeting, Mr Johnson wrote to Mr Burgess to say he would raise the ‘serious concerns’ with David Gauke, then Financial Secretary to the Treasury.

As the scheme was registered with HMRC, he said he would write to its then chief executive Lin Homer to ‘question the approval process and the criteria for approval’, he said.

He added: ‘As soon as I have received their responses, I will ensure you are kept informed.’

But auto worker Mr Burgess says: ‘That’s the last correspondence we had. I’ve tried on numerous occasions to try to get another meeting without success. 

‘It’s just shocking what happened. Without the support of others in the same situation I would be at breaking point.

‘I’m 52 so I want to think about retiring. Some of the victims are retirement age and left without a pension.’

One of his colleagues who also signed up to the scheme lost £180,000 and has had to sell his house, he says.

‘I just wish I could turn back the clock. Ark is just one scheme and there are many more out there. I hope that now Boris is in No 10 that he will do something. It’s long overdue.’

Another attendee at the meeting, and also pictured with Mr Johnson was Sue Flood, who has described enduring years of hell after she and her partner lost £125,000 in the Ark scheme.

They are now being pursued by HMRC regarding tax bills of £60,000.

Taxman KNEW it was risky 

A car repair worker suffered a breakdown after losing his pension to a scam scheme that HMRC officials had privately raised concerns about.

Gary Chittenden says he would never have signed up to the Ark scheme if he had known there were doubts raised about its legality at a meeting behind closed doors in February 2011.

Gary Chittenden (pictured with wife Julie) says he would never have signed up to the Ark scheme if he had known there were doubts raised about its legality

But, because there were no public warnings, he trusted the HMRC-registered scheme and transferred in his pension three months later.

Within weeks, HMRC had removed the rogue trustees running Ark, and a High Court judge later ruled it was a ‘fraud on the trustees’ powers’.

Gary lost £30,000 and is now being chased for a potential £50,000 tax bill because he received a lump sum, which HMRC have now deemed an unauthorised pension payment.

The 55-year-old, who lives with wife Julie, is on anti-depressants and fears going to jail.

He says: ‘HMRC registered this scheme, which is why we all trusted it. Now, after losing so much to it, they are also going after us for signing up to it.’

The victims had previously had several meetings with then Work and Pensions Secretary Iain Duncan Smith, who wrote to one of his constituent victims in December 2014 saying: ‘There is a case [for HMRC] to reconsider their position for those who were impacted by their previous registration process.’

A No 10 source said Mr Johnson had followed up with Mr Gauke and Ms Homer as he had promised to do, to highlight what had happened and to push his constituent’s case.

And former Home Secretary Jack Straw raised the issue with Mr Gauke in parliament in May 2005 after being contacted by one of his constituents who was a victim of Ark.

He said: ‘It seems to me that my constituent has been the innocent victim of an elaborate and sophisticated arrangement designed to evade our pension laws. I have no sympathy for the architects of the scam or for those advising them.’

Mr Gauke responded that it was a difficult case and it was ‘hard not to be sympathetic’ to those who joined Ark.

‘HMRC’s role is to ensure that the tax system is being complied with. It is not there to perform a role of consumer protection but to ensure that pensions are not liberated, and we have made a number of changes in recent months to strengthen its powers in that area.’

A painstaking investigation by the Mail discovered at least 105 rogue pension schemes registered with HMRC and the Pensions Regulator. 

After the Government belatedly tightened checks on UK based schemes, scammers started operating abroad using overseas pensions listed with HMRC to give their cons the appearance of respectability.

An HMRC spokesperson said: ‘HMRC cannot and does not authorise pension transfers.

‘Pension schemes which individuals are currently with are responsible for carrying out due diligence on transfers to other pensions schemes and ensuring they comply with the legislation. 

Through a strong governance process implemented in 2014, we can quickly de-register schemes set up to avoid pensions tax rules where we have sufficient evidence.’