Pension scammers target bumper year

30 December 2015

Almost one in five over-55s think they have been targeted by financial fraudsters trying to scam them out of their retirement savings since April's pension freedoms came into force.

Responding to a survey by True Potential - a company that provides services to IFAs - 20 per cent of men aged over 55 say they've been contacted by people offering investment opportunities they think were scams. Only 10 per cent of women said the same, bringing the overall total to 16 per cent of respondents.

The government estimates the new pension freedoms are available to 400,000 people in the UK. If True Potential's research is truly representative, this means up to 64,000 people could have been exposed to scams.

Fewer advisers than needed

With HMRC estimating that £2.5 billion has been taken from pension funds since April, scammers may be enjoying a very prosperous year.

Wales emerged as potentially the hottest area for scams, with almost a third of Welsh respondents saying they've been targeted, this compared to just 7 per cent of respondents in Northern Ireland claiming they had been approached.

'Pension freedoms remain an excellent and revolutionary policy that we fully support,' says True Potential partner David Harrison. 'The question is: how can we support consumers who wish to access their pension pot, so that they can make good decisions and don't fall victims to traps?

'Access to professional financial advice has never been more important... but the freedoms have come at a time when there are far fewer advisers than we need, lacking the incentive to go out and find new customers and charging fees that put customers off.'

A survey by Saga Investment Services recently found that almost a fifth of people aged 50-plus are completely ignorant of the new pension freedoms.

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