Pension savers are underestimating how many scammers are trying to get their hands on their retirement cash.
Millions of pounds are stolen and fraudsters have been thwarted in thousands of attempts to grab hard-earned pension pots.
The City of London Police has revealed that £8.6 million was taken in just 24 pension cases in just one month – March 2017 – and bogus financial advisers have snatched £42 million since pension freedoms started in April 2014.
Pension provider Phoenix has revealed that 1,393 pension scams involving almost £30 million in four years, which is a rate of one attempted fraud every working day.
The firm says scammers are becoming more sophisticated and is calling on the government to extend a proposed ban on cold-calling to cover emails and texts.
Fraudsters get smarter
The measure was dropped by the government due to lack of time before Parliament was dissolved for Election 2017.
‘Fraudsters are getting smarter and use a myriad of methods to reach and trick their victims. People need to be vigilant, particularly when sharing personal information and data, and contact their pension provider if they have any doubt,’ said Shellie Wells, communications director at Phoenix.
‘The government’s potential ban on cold calling should be a high priority, but if it is to tackle fraud effectively Phoenix believes that it should cover all forms of electronic communications such as email and text messaging.’
Despite high-profile campaigns to alert savers about fraudsters, pension thefts are on the rise.
In February, the amount stolen was £779,000.
Open door to vulnerable savers
Pension freedoms were designed to give more people easy access to their savings, but have opened the door to scammers, says Andrew Tully, at annuity and equity release firm Retirement Advantage.
“Pension scammers are a modern-day scourge, as reported fraud losses are counted in the millions.
“Pension freedoms have opened up the market to conmen and fraudsters who prey on the vulnerable and those hoping for early access to their pensions.
“The sooner we can get the ban on cold-calling back on the next government’s agenda the better.”
To persuade retirement savers to hand over their cash, they promise a better return on investments or a lump sum from their pots before they reach the age of 55, which is the minimum age to take money from a pension.