Eight out of 10 requests for overseas pension transfers are scams designed to raid savers’ pots, Aegon warns.
The provider’s analysis of 50 requests to transfer pensions to overseas schemes in the first quarter of this year found 80 per cent were actually fraudulent.
Aegon says fraudsters have been targeting small pots of around £30,000 after customers are lured in with the promise of pension reviews.
If a pension is transferred to an overseas scheme that does not meet HMRC’s requirements, the pot can be subject to an unauthorised payment charge normally around 55 per cent.
In the worst cases, entire pension pots can be lost for good.
Last week, international advisers branded HMRC’s list of recognised overseas pension schemes “irrelevant” after it slashed the number of approved schemes.
Aegon regulatory strategy manager Kate Smith says: “Fraudsters are not only plausible but are also highly persuasive and it can be all too easy to fall for their polished performance, unless you are on your guard.
“We’re seeing more and more sophisticated ways of unscrupulous people getting their hands on people’s retirement savings and it’s not just the over 55s who are being preyed on, younger customers are being targeted too.”
However, Standard Life head of pensions strategy Jamie Jenkins says the provider does not have a big issue with overseas transfers.
He says: “We certainly share the concern for the dangers of pension scams and it has become a major focus within our transfer checks. That said, we have seen far less of an issue with Qrops and we believe only a minority of those we are asked about are potential scams. The vast majority of our Qrops transfers are to long established and well known overseas schemes.”