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Pension fraud losses jump 25%, say police

City of London Police raise estimate of pension fraud losses to over £13 million since introduction of freedom reforms last year.

 
Pension fraud losses jump 25%, say police

City of London Police have confirmed an alarming rise in the amount of retirement savings lost to fraud since the introduction of pension freedoms last year.

Figures released earlier this year suggested the amount lost to fraud after the pension freedom reforms were introduced in April 2015 was £10.6 million. This was up from fraud losses of £5.4 million for 2014.

City of London Police has now raised this amount by 25% to £13.3 million, as the victims of fraud updated their reports to reflect the full amount they lost. 

The figures collected by City of London Police do not include money moved out of a pension scheme into an investment vehicle, meaning the total amount lost since freedoms is likely to be higher. 

Pension provider AJ Bell, which collected the updated information from City of London Police, called on the government to do more to stop pension scams, including taking measures to tackle cold calling. 

Independent financial adviser Darren Cooke started a petition last month calling on the government to ban cold calling for investments and pensions.

It has received support from former pensions minister Ros Altmann, who has raised the topic in the House of Lords, and three advice networks.

AJ Bell senior analyst Tom Selby said banning cold calling would help stop scammers. 

'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,' he said.

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

2 comments so far. Why not have your say?

Felicity's Dad

Oct 26, 2016 at 15:34

Whilst highly sympathetic to anyone who has lost money through fraud, in the scheme of things £13m seems a paltry sum. There does also appear to be an attempt to link pension "freedom" with fraud. However, dodgy pension scams have been around far far longer than the changed pension legislation. Anyone else remember Hong Kong QROPS? Caveat emptor.

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Simon N Welch

Oct 27, 2016 at 07:11

£13 million may be "a paltry sum" in overall terms of the pension market, but to the individuals concerned, the loss is devastating, no matter how stupid they may have been to fall for a scam.. This really is a rather silly thing to say, I'm afraid.

Banning cold calling will do nothing to stop these scams - if necessary, they'll call from abroad. Rather, the idea of pension freedom, another of Osborne's great ideas, should be revisited. For too many people in years to come, the prospect of a large slab of jam today, even if it leads to poverty tomorrow, will be too much to resist, I fear.

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