I caught up with an FT article a couple of weeks ago on one Thomas Hale’s experience of ten days in a Chinese COVID detention centre. He had been in contact with someone with COVID and had been taken into a government isolation centre. I read it with horror and a certain sense of déjà vu that had me reliving my own summer of 2022 experience in quarantine on board a cruise ship in the Arctic. I caught COVID on a ship where over 50% of passengers were already coughing and sneezing (I was only tested because I asked for headache pills).   The parallels with China are uncanny - being forcibly escorted from my luxury cabin by crew in hazmat suits to a quarantine cell in the bowels of the ship, being fed very poorly, having limited communication, no fresh air or exercise and being treated like a criminal. Correction, I believe prisoners are entitled to some fresh air each day. I even had to buy my own flight tickets home! You shouldn’t receive this treatment from anyone, let alone one of the world’s most known and high-end brands.

After that experience, I was pleased to get stuck into the pensions world again. Those who know me, know that my focus is on better outcomes, whether on scams, misselling or superfund consolidation. Sadly, 2022 was disappointing on all those fronts. 

Despite battling for so long, I continue to be reminded of years of poor treatment of victims of pension scams. Nowadays most of us accept that scams are real and are a scourge, and most of us try our best to prevent them. However, we also manage to look away from victims because victims are other people - and it could never happen to us. 

But bad things do happen to nice people. Lots of very nice people have lost their pension savings forever. Just sit with that for a moment. Lost every penny, forever. Nice people are made to feel like criminals because they didn’t know better than the scam advisers who fleeced them by assuring them they were regulated and the arrangements they offered were above board. Scam victims were cheated. They didn’t know the rules, yet they have been punished while those who cheated them walk away. 

We are a first world country, but HMRC happily levies significant tax charges (the maximum they are allowed to) on amounts some victims received or were eligible to receive earlier than regulations permit.  HMRC of course only “follows orders” on tax charges, despite the hardship and grief caused, much like the cruise ship’s doctor had to follow an out-of-date protocol and lock me up for days for no good reason. A breach of my human rights and I was powerless to do anything. Imagine if my distress had gone on for more than 10 years rather than 10 days. This is reality for some scam victims.

In my first blog of 2023, again I beg our government to listen to my appeals for better tax treatment of past scam victims - they have been unwilling to do so for several years now. I understand that they have many urgent things to deal with, but the cost to give comfort to pension scam victims is fairly small at around £20million (peanuts in the grand scheme of giveaways over the last couple of years) but the impact would be great

Arguably, Treasury has received more than this sum already in the way of income tax on pensions paid to scheme members that would otherwise have been lost to scammers, without the actions of providers following the PSIG Scams Code.  So why not do the decent thing and write off the tax charges from pension scam victims prior to 2014? Levying tax on the innocent victim is not a disincentive to those who would abuse regulations, no matter how much you say it.  And no matter how much you say it, it never gets fairer – the majority lose out to address a minority.  Changing the tax rules to be fairer to victims is easy to do. I formally proposed a solution in 2019, which the Work and Pensions Committee supported, but sadly government did not. 

Ironically, had the victims been transferred to a safe pension scheme, they would have received their benefits by now. Instead they continue to receive annual reminders from HMRC of the interest being added to the amount of tax they owe, unless they are cowed into paying the unfair tax just to see an end to the pain.

HMRC will not change their approach unless instructed to by government. So come on Chancellor, let 2023 be the year of showing kindness and common sense.