Later Life

One in 10 targeted by pension freedom scammers

4th May 2018
call centre pension scam cold phone
"Pension freedoms, though enormously popular with consumers, have created a potentially lucrative opportunity for fraudsters"

9% of over-55s say they have been targeted by suspected scammers since the launch of the pension freedoms, according to Prudential research.

Offers to unlock or transfer funds were the tactics most commonly used to defraud people of their retirement savings.

A third of over-55s say the risk of being defrauded of their savings is now a major concern, but 49% of those approached say they did not report their concerns because they did not know how to or were unaware of who they could report the scammers to.

Prudential’s research found fewer than one in five (18%) of those approached by suspected scammers had reported their fears to authorities. Nearly half (47%) said the approaches involved offers to unlock pension funds or access money early, and 44% said they involved transferring pensions.

About 28% of those targeted by suspected fraudsters were offered alternative investments such as wine and 20% say they were offered overseas investments while 13% say scammers had suggested investing in crypto-currencies. Around 6% believe they have been victims of frauds.

Most recent pension fraud data from ActionFraud shows 991 cases have been reported since the launch of pension freedoms involving losses of more than £22.687 million.

Vince Smith-Hughes, retirement income expert at Prudential, said: “Pension freedoms, though enormously popular with consumers, have created a potentially lucrative opportunity for fraudsters and people need to be vigilant to safeguard their hard-earned retirement savings.

“If it sounds too good to be true then it usually is and people should be sceptical of investments that are offering unusually high rates of return or which invest in unorthodox products which may be difficult to understand. If in any doubt, seeking independent advice from regulated professional advisers will help ensure they won’t get caught out.

“The Pensions Advisory Service, FCA and The Pensions Regulator are doing good work raising awareness of the risks of scamming and by reporting suspected scams consumers can help the authorities tackle the issue and maintain confidence in pension freedoms.”

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