New research from Portus, the employment benefits consultancy firm, has revealed one in seven over-55s have been targeted by suspected pension fraudsters since the launch of pension freedoms. The study illustrates a rise in pension scams since new pension rules allowed savers to access their entire pension cash subject only to tax at their marginal rates.
 
The report reveals that 24% of the scams involved being offered other products to invest pension savings in without explaining what they were, while 69% said the suspected fraudsters tried to access their funds by offering a ‘free’ pensions review.

More than a quarter (27%) said the suspected scam involved being offered an ‘exotic’ investment scheme promising attractive levels of return.

Almost half of those who suspected fraud felt they had been approached more than once, with just 12% of these having alerted the authorities.  

It is thought that there could be over 1,600 suspicious companies or schemes involved in UK pension scams, as between April and August this year more than £9 million was stolen from savers.  However, Portus believes that the true figure could be much higher because only a small percentage of those who believe they have been targeted by these criminals reported it to the authorities.

Speaking about the findings Portus Consulting Commercial Director Steve Watson said: “The pension freedoms are to be welcomed because they give people greater control over how they use their own money. However, more needs to be done to educate people about pension scammers and also capture and deter these criminals.  Employers can also play a role here through their employee benefits programmes.

“The amount of money savers lost to pension scammers between April and August this year was just over £9 million, which is around twice as much as the same period in 2014. However, these figures could be just the tip of the iceberg.”

Portus’ research reveals that 52% of people aged 55 and over who have been approached have been targeted once by pension scammers since April,  but 35% say they have been approached up to five times while 13% have been approached more than five times.       

The most common way used by potential scammers to contact over-55s is by email cited by 36% of people who believe they have been targeted.  This is followed by phone (33%) and post (28%).

Portus have offered pointers on how to protect yourself against a pension scam, tips include:

•    Be wary of people calling about tax loopholes offering to unlock your pension before you reach 55.

•    Be on your guard against companies offering unusual investment schemes offering high returns.

•    Don’t feel pressured into transferring funds or to send documents quickly.

•    Be wary of any company or person who first makes contact with you via email, phone, text message or door to door.

•    Check that the company you are speaking to is registered with the FCA.  The FCA also has a list of known investment scams which you can check