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Beware of the pension scammers

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Up to 64,000 men and women over 55 believe they have been offered rogue investment opportunities designed to scam them out of their retirement fund since April’s pension freedom changes, according to True Potential.

With the HMRC estimating that some £2.5bn has been withdrawn from pension funds since April, this means scammers could potentially have walked away with £400m, according to True Potential’s latest research as part of its ongoing Tacking the Savings Gap campaign.

The government estimates that the new pension freedoms are available to 400,000 people in the UK. According to the research some 20% of men aged 55 and over said they have been contacted by people offering them investment opportunities that they believe were scams.

Only 10% of women expressed the same concerns, while overall 16% of all adults eligible to their pensions fund felt they had been the victim of a scam approach.

Wales was the UK’s hotspot for scams, with almost a third of Welsh respondents stating they have been approached while only seven per cent in Northern Ireland expressed the same concerns.

David Harrison, managing partner at True Potential, said: “Pension freedoms remain an excellent and revolutionary policy that we fully support. The question is how can we support consumers who wish to access their pension pot, so that they can make good decisions and don’t fall victim to scams.

“Access to professional financial advice has never been more important to help consumers reach their goals. But the freedoms have come at a time when there are far fewer advisers than we need, lacking the incentive to go out and find new customers and charging fees that put consumers off.

“People with relatively small pots of money are particularly vulnerable because many feel that it is not worth paying for advice, which can run into the hundreds or thousands of pounds. The Financial Conduct Authority and the Treasury must find a way through the Financial Advice Market Review (FAMR) to make advice more accessible and affordable for everyone, or we will simply see more pensions scam victims in the future.”