Pension Fraud Doubles With Flexible Access

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Pension fraudsters are smooth-talking retirement savers into parting with their cash with scams, new figures show.

Bogus investment advisers are preying on the greed of savers by luring them into handing over their life-savings since the introduction of flexible access pensions in April 2015.

New research shows that the amount of money stolen by pension fraudsters has doubled since the new measures were introduced that allow retirement savers over 55 years old to take their pension cash to spend as they wish.

Employment benefits consultancy Portus says fraudsters have approached one in seven over 55s to try to persuade them to switch their savings into a scam investment.

Scammers grab £9m in six months

In the report, the company claims:

  • 69% of fraudsters start their scam approach with the offer of a free pension review
  • 27% of savers suspect a scam
  • Most investments involve foreign property, airport parking places and self-storage opportunities

As a result of a massive step up in seeking victims, pension fraud has doubled since pension freedoms were introduced.

More than £9 million in cash has disappeared since April, compared to around 34.5 million last year.

But the amount lost to scammers could be much higher as the firm estimates 12% of victims do not realise they have fallen victim to a con and fail to report the crime.

Victims unaware of fraud

The company said most fraudsters start their attempt at a scam with an email, although many also try texts and cold-call phone contact.

“Pension freedoms are good for retirement savers because they have more control over their money and how to spend it,” said Portus commercial director Steve Watson.

“However the downside is the freedoms also give scammers a better chance of stealing money because many pension savers do not realise that they are being scammed when they are offered what seems a great opportunity to gain a better return on their money.”

Meanwhile, police have reported that cybercrime; including online fraud has doubled the crime rate in England and Wales by including 5.1 million offences reported to police in the past 12 months.

The increase is mainly due to a change in how the Home Office records crime statistics by including online crime for the first time.

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