Fraudsters repeatedly target pension lump sums

Over-55s are facing a deluge of fraudulent cold-calls and emails purporting to offer lucrative pension opportunities, according to research by Citizens Advice.

Figures from the consumer rights body show that 2 in 5 Citizens Advice staff have seen over-55s repeatedly targeted by scammers since the pension freedoms were introduced 4 months ago.

Half of the surveyed Citizens Advice pension workers said that pension scams are quickly evolving into investment scams that target the cash lump sums people can withdraw from their pots.

Citizens Advice has identified 3 emerging types of scam:

  • Vague financial investments
    Fraudsters offer pensioners to invest their savings into unspecified financial products in return for giving them access to their pension pots.
  • Free pension reviews
    A free review is offered to pensioners through cold-calling and texting, and the caller asks to visit them at home with paperwork that allows them access to their pension details.
  • Cash for investments
    Scammers approach pensioners and offer to invest their savings into products such as property and wine.

Citizens Advice surveyed more than 460 managers, staff, volunteers and Pension Wise guiders and found that cold-calling was the most common communication method used by fraudsters:

  • 4 in 5 said people were contacted via phone
  • 1 in 3 identified emails as the method used to contact over-55s
  • 1 in 3 said people were contacted by post
  • 1 in 5 saw pension savers targeted by text message.

Gillian Guy, chief executive of Citizens Advice, said:

"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.

"Pension and investment scams are particularly dangerous as they can destroy people's entire pension pot, leaving them with little or no savings for retirement. We will be monitoring pension scams closely in order to track how they are evolving, and warn consumers what to look out for."