27th October 2015
One in seven of working over-55s have been targeted by pension fraudsters, a new study has revealed.
Nearly half who suspect fraud have been approached more than once, the research by Portus, the employee benefits consultancy, has found.
However, 12% of those who have been targeted by pension scams did not report it to the authorities.
The pension freedoms introduced in April this year gave people more control over their savings, but it has also led to a rise in those being targeted by fraudsters, according to Portus.
The findings reveal that 24% of the scams involved being offered other products to invest pension savings in without explaining what they were while 69% said the suspected fraudsters tried to access their funds by offering a ‘free’ pensions review.
More than a quarter (27%) said the suspected scam involved being offered an ‘exotic’ investment scheme promising attractive levels of return.
Estimates suggest that more than 1,600 suspicious companies may be targeting pension scheme members.
Portus’ research reveals that, of those targeted by scammers, 52% have been approached since April and 13% have been approached more than five times.
Victims are generally contacted by email, phone or post.
Portus Consulting commercial director Steve Watson says: “The pension freedoms are to be welcomed because they give people greater control over how they use their own money. However, more needs to be done to educate people about pension scammers and also capture and deter these criminals. Employers can also play a role here through their employee benefits programmes.
“The amount of money savers lost to pension scammers between April and August this year was just over £9 million, which is around twice as much as the same period in 2014. However, these figures could be just the tip of the iceberg because our research shows that many people don’t report the fact that they have been targeted.”