Police have reported a huge increase in financial losses from so-called pension liberation fraud, while a major financial advisory group says more of its clients are reporting approaches by scammers too.
Independent financial advisory group deVere reveals that 28% of its clients have been approached by a dodgy firm to ‘liberate their pensions’.
Police figures suggest that the scammers may be winning, with losses from pension liberation fraud jumping 234% between April and May. These findings support fears of a ‘boom time’ for criminals looking to scam older people out of their pension savings.
With glossy brochures and professional-looking websites, fraudsters are getting more sophisticated in their methods of duping pension savers. A desire for better returns in a low-interest savings market means that some people may be lured by the promise of fantastic returns.
Scammers are also targeting British pensioners living and working overseas. deVere has heard reports from the Middle East, US, Thailand, Australia, South Africa and Spain of propositions from ‘pension liberation’ firms which are most likely to be unauthorised or illegal.
These firms typically tell them that they can benefit from ‘unrivalled returns’ by putting their funds into very high-risk or totally bogus investments.
Even if the scheme isn't a scam, you could still be hit by a whopping tax bill for withdrawing your pension early.
The recently-launched Project Bloom hopes to protect vulnerable pension savers by encouraging them to get free impartial pensions advice as well as teaching them how to spot a scammer.
It’s led by the National Crime Agency and includes the Department for Work and Pensions, the Pensions Regulator, Financial Conduct Authority, HMRC, Serious Fraud Office and National Fraud Intelligence Bureau.
Don't be tempted by promises of fantastic returns. If it sounds too good to be true, it probably is.