Pension fraud could be 25% higher than first thought

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The amount of pension fraud since the freedoms were introduced could be 25 per cent higher than first thought, analysis of City of London Police statistics suggests.

City of London Police put the scale of pension fraud losses at £10.6m in the six months since the pension freedoms were introduced in April 2015.

AJ Bell has obtained updated statistics which show the figure has been revised up to £13.3m, another £2.7m on top of the initial estimate.

Based on the new data, the investment platform puts the year-on-year spike in fraud reports was at 146 per cent since the freedoms.

For the same period in 2014, pension fraud losses are estimated at £5.4m.

The figures do not cover frauds from transfers out of pensions into investment vehicles.

AJ Bell said the figures made the case for a ban on pension cold calling as suggested in a petition by Red Circle Financial Planning director Darren Cooke.

AJ Bell senior analyst Tom Selby says: “Judging by this data, the post-freedoms pension fraud spike was worse than we had previously feared, and yet the Government continues to sit on its hands when it comes to taking meaningful action to deter scammers.

“A broad coalition of observers, from former pensions minister Baroness Ros Altmann to advisers and providers, agree banning cold calling could make a real difference in the fight against pension fraud.”