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Pension scammers target savers following Budget bombshell

Savers are nearly three times as likely to be contacted by pension scammers following Chancellor George Osborne’s Budget pensions reform announcement in March,

Some 42 per cent of 2,000 people surveyed said they have been approached by firms offering to help them access their pension since the Budget, research commissioned by Phoenix shows. Prior to the announcements, this figure was just 15 per cent.

More than one in ten 18-to-34-year-olds say they have already released some or all of their pension as cash after being contacted by scammers.

Of those who want early accesss to their pension, 29 per cent said they would speak to an adviser but 46 per cent admitted they would only speak to family and friends.

Phoenix intelligence and investigations manager Parminder Dhothar says: “The increase in aggressive targeting by pension scammers in the last nine months is very concerning; people can lose their life savings to these con men.

“Many unscrupulous businesses offer customers the opportunity to unlock their pension in exchange for cash, before they reach 55, and often without making them aware of the fees they are charging for this service. The fees can be as high as 30 per cent.

“People are being deceived into making transfers into these schemes even though many people in defined contribution schemes will be able to access cash directly from their pensions from April 2015.”

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Comments

There are 7 comments at the moment, we would love to hear your opinion too.

  1. The easiest way to avoid scams of any nature is to hold the transferring provider/trustee/addministrator accopuntable by legally forcing them to only transfer pension funds to another authorised provider/trustee/administrator.

  2. I don’t understand why it isn’t perfectly simple to introduce additional checks when a transfer is requested. This problem could easily be rectified. Is the new scheme a legitimate UK pension scheme or not? Where/What is the scheme HMRC approval number?

  3. “More than one in ten 18-to-34-year-olds say they have already released some or all of their pension as cash after being contacted by scammers ?” >10%?

    Did they understand the question, contacted maybe released funds ?
    to me this does not sound correct,

    unless someone else has more information, please enlighten me

  4. But what are the holding providers of these PP funds doing to ensure that they don’t release funds to any scheme other than properly authorised ones on a bona fide register? Shouldn’t such a requirement come within the remit of due diligence? WTF’s the FCA doing about it? All it needs to do is instruct all the recognised, properly authorised providers that if they release funds to an unauthorised scheme, they will be responsible for the consequences. Gordon Bennett, how difficult can it be?

  5. Well maybe the Providers and Trustees should be more careful where they send the money, especially in respect of under 55’s, surely they look for the fact that “advice” has been taken from an FCA registered individual or company.

  6. The easiest way to make sure these scammers never get chance to bust schemes illegally is to get The Pensions Regulator and/or HMRC involved and make the process secure so that it is only those organisations that provide an official certificate to the trustees/administrators of the scheme looking to make a payment , thus allowing them to make that payment….otherwise it can’t be done…..simplz!

  7. Plenty of effort is being made to prevent these scams. In fact of the hundreds of complaints the Pensios Ombudsman has had regarding transfers recently, the vast majority have been from members complaining that their TVs are being delayed – due to providers’ concerns about possible pension scams.

    The problem is that these scams are often difficult to prove. And as the Ombudsman points out “if the transferors had had a statutory right that they were determined to enforce, even in the face of severe warnings, then, after the providers had made such enquiries as thought necessary to establish whether the right existed, the providers could not have further resisted payment.”

    But anyway it won’t go on for long. Much better pickings I suspect from conning those who are over 55 and legitimately entitled to withdraw their money from April to do what they want with it. Thanks to that nice Mr Osborne.

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