Pension liberation scammers have contacted almost half of all pension holders to try to persuade them switch to their bogus schemes, according to new research.
Retirement savers are three times more likely to receive a call or message from a pension liberation firm than nine months ago, says a study by financial firm Phoenix Group.
Around 45% of all pension savers have been approached by pension liberation scammers, the firm reveals – and of the tens of thousands of people contacted, one in six discussed their retirement options with the scammers.
While 38% of retirement savers who are thinking about accessing their cash under new flexible drawdown rules in April are likely to opt for a free online pension reviews which are typically fronts for fraudsters.
Young savers targeted
The firm’s research went on to disclose that 11% of pension savers contacted considered responding to cold-call emails, texts or phone calls.
The fraudsters are also targeting the under 55s, who do not have the right to flexible access drawdown.
The research showed 20% of 18 to 34 years olds and 18% of 35 to 54 years olds spoke to fraudsters about taking cash from their pensions – and 12% of pension savers under 34 had already taken money from their funds with their help.
Under pension rules, pension savers under 55 can only access their cash under strict special circumstances. If they do take some or all of their money, HM Revenue & Customs (HMRC) will demand a tax penalty of at least 55% of the cash withdrawn.
The company also confirmed that 1,074 pension savers with funds totalling more than £22 million had been stopped from transferring their money to suspected fraudsters.
High fees
Phoenix is part of a pension industry campaign to alert pension savers about the risks of switching their money to suspected fraudsters.
Intelligence and investigations manager Parminder Dhothar said: “The way pension liberation scams have ramped over the past few months is concerning. Savers risk losing all their money to these fraudsters.
“The offer of unlocking a pension before the age of 55 can be tempting, but these scammers do not mention the high fees they charge or the tax penalties involved. We have seen fees as high as 33% of the pension saver’s fund demanded.”
Dhothar suggests anyone approached by a pension liberation cold call should go to an IFA for a second opinion before transferring any money or signing any contracts.
