Almost 50% of over-55s unaware how to report scams; over £22.5m lost since pension freedoms

Written by Talya Misiri
04/05/18

Close to one in 10, 9 per cent, of over-55s have been targeted by suspected scammers since the introduction of the pension freedoms, losing more than £22.687m, Prudential and ActionFraud have reported.

According to a study from Prudential, 9 per cent of over-55s have been approached by assumed scammed since the new reforms came into effect in April 2015.

While offers to unlock or transfer funds have been the tactics most commonly used to swindle people of their pensions, almost half, 49 per cent, of victims approached by scammers said that they did not report their concerns. This was either because they did not know how to or were unaware of who they could report scammers to.

Prudential found that a further third of over-55s say the risk of being defrauded of their retirement savings is a major concern following the introduction of the pension freedoms.

Nonetheless, the research also highlighted that one in five of those approached by suspected scammers had reported their concerns to authorities. Of those approached, 47 per cent said that the scams involved offers to unlock pension funds or access money early, and 44 per cent said it involved transferring pensions.

Furthermore, the most recent pension fraud data from ActionFraud revealed that 991 cases have been reported since the launch of the pensions reform that involve losses of over £22.687m. The statistics show that the total loss to pension scammers rose from £1,036,122 a month before the freedoms were introduced to £1,783,442.99 in April 2015.

Prudential retirement income expert Vince Smith-Hughes 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.”

Advisory bodies and regulators including the Financial Conduct Authority, The Pensions Regulator and The Pensions Advisory Service are working to raise awareness of pension scams and encourage victims to report all cases.

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