Scammers Snatch £6 Billion A Year From UK Pensions

Lisa Smith, BA (Hons), CeFA

Security experts reckon not enough is done to protect retirement savings and crooks are ripping off upwards of £6 billion a year from pensions in a new report.

Although the focus has been on stopping pension liberation, wider risks come from dishonest scheme managers and risky investments.

In some cases, the frauds are run by organised crime gangs, says the report The Nature and Extent of Pension Fraud from security consultants Crowe.

Most of the losses come from private and workplace pensions, but around £1.1 billion is stolen from public pensions each year as well.

“Pension schemes are attractive to fraudsters. Large sums of money being held for beneficiaries, who, in most cases, have very little involvement in overseeing their accumulation, stretched over a long time period, presents a fertile opportunity,” said the report.

Too little protection for pension cash

“There is an assumption by beneficiaries that ‘everything will turn out alright’ when they retire. This is occasionally compounded by a lack of knowledge surrounding the complex and far removed management of an individual’s fund.

“The situation does seem at odds if one compares the extensive protection that the banking sector puts around the relatively small sums usually found in our current accounts, with the lax protection in place around the much larger sums held in pension pots.”

Meanwhile, after a lull, scammers are resorting to cold-calling again, say solicitors Griffin Law.

Although laws to ban cold calling put a lid on cold calling, the number of phone, email and messaging scams are rising again.

Scammers go back to cold calling

Data from HM Revenue & Customs referenced by the firm shows nearly 200,000 scam calls were reported in 2019 – a 234% rise over 2018 and 2019.

While HMRC and telecoms providers have cracked down on email and text scammers, fraudsters have changed tack back to making unsolicited phone calls.

An HMRC spokesperson said: “Scammers use a range of techniques, including phoning taxpayers and offering a bogus tax refund, or threatening them with arrest if they don’t immediately pay tax owed.

“These scams often target the elderly and vulnerable, who are called and told that they owe tax, sometimes accompanied by threats of legal action. We are a well-known brand, which criminals abuse to add credibility to their scams.”

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