Just four months after the introduction of the government's pension freedoms giving savers much more freedom to invest or spend their pension pot how they like comes news from the Citizens Advice Bureau reporting that the over 55s are being hit hard by scammers. These scammers are repeatedly contacting them offering them a plethora of fake and fraudulent pension opportunities and plans, designed to relieve them of most, if not all of their pension pot.
Gillian Guy, Chief Executive of Citizens Advice, said:
"Pension scams threaten people's financial security. People are being targeted again and again with bogus investment offers or fraudulent pension opportunities.
Opportunistic fraudsters are finding new ways to go after people's pension pots including offering free pension reviews and promising to invest in funds that don't necessarily exist."
She goes on to say that feedback from their frontline centres shows that these types of scams are particularly dangerous as there is the potential for people to lose their entire pension pot
The Citizens Advice Bureau have found that three distinct scams are emerging:
- High rate return investments - These scams play on people's greed and offer unrealistic high rates of return. In actual fact, investors rarely see any of their money back.
- Free pension review - These are common scams where people are texted, emailed or cold-called with the offer of a free pension review. They are then visited by a very believable salesperson who convinces them to sign certain documents which gives the scammers full access to their pension pot.
- Investments for pension cash - These involve people being advised to invest their pension pot into overseas property or fine wines. These investments almost certainly don't actually exist and people have lost their entire pension savings in such scams.
The statement by the Citizens Advice Bureau comes just weeks after Action Fraud reported that pensions liberation fraud, where savers who are below the age of 55 had risen from £1.5m to £4.7m since the introduction of the new pension freedoms. The true scale of all pension fraud could however be much much more, as it is only after several years that it becomes apparent that a scam has taken place.
If you enjoyed this article, you may also like The Ultimate Guide to Online Fraud in the Workplace.