Pension Fraud Has Tripled After Pension Freedoms Announced

Pension fraud has tripled in July following new pension freedoms according to London Police’s Action Fraud.

Members of the public are reported to have lost more than £4.7 million in May. More than £1.4m had been lost in April and £932,000 was lost in March.

Action Fraud said it may be too early to conclude the increase was a direct result of the new pension freedoms announced in April as reports were months before the pension freedoms were announced.

Pension fradusters target the elderly and persuade them to release the money for a fee. While this is engaging enough, they do not announce that victims could be subject to large tax bills.

When retrieving pensions, retirees could be taxed at a maximum of 55%. The pension reforms could include taxes above 75% of their savings. For anyone receiving income above £150,000 in a year could face about 45% in taxes.

Some victims have lost more than £60,500 or even more than half their pension yearly.

“With regards to the recent pension reforms, and the effect that this will have on pension liberation fraud, it is at this stage difficult to draw any conclusions,” said a spokesperson for Action Fraud.

The pensions minister, Baroness Ros Altmann, agreed with that analysis.

She said she was “not convinced” that the pensions freedoms have led to a rise in fraud.

“People are a lot more aware of it, and are starting to report it. It can take a long time for people to realise they’ve lost their money,” she told BBC Radio Five Live.