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More than 1 in 8 of over 50s has been targeted by pension fraudsters

30th September 2014 Print

Over one in eight (13%) of people aged 50 and over have been approached by fraudsters, promising to release more than the 25% lump sum or to gain early access to pension savings, research from Fidelity Worldwide Investment reveals.

Surveying the nation’s over 50s on their knowledge of the pensions’ access rules and their experience with pensions liberation firms, the survey showed that fraudsters are targeting predominantly the ‘at retirement’ generation; these figures rise to 17% amongst those aged 50-59, dropping off to 11% for those 60 and over.

While the majority of those aged 50 plus (61%) who had been approached detected the advice as a scam straight away, 27% did not, and a further (12%) were actually interested in the conversation and trusted the advice. 

Furthermore, the research revealed distinct misunderstanding around the rules concerning access to retirement funds. Post April 2015, anyone aged 55 and over can access all or some of their pension without any of the tax restrictions that currently apply.

However, over two thirds (68%) don’t know the rules around accessing their pension savings early while 23% of adults aged over 50 are not aware of the recent changes to regulation in this area. Furthermore, three fifths (59%) of those who claimed they were, do not actually understand that the required age to access their pension as a lump sum is 55 and over.

Perceived Age to access a lump sum

Lump Sum can be accessed at any age 3%

Minimum age required is 50+ 10%

Older than 55 41%

Minimum age required is 65 13%

Minimum age is state pension age 18%

Don’t know 15%

Alan Higham, Retirement Director at Fidelity Worldwide Investment, comments:  “While fraudsters have always sniffed around pension savings, the changes set to come into effect next April have created some confusion among consumers.

“Some understand the rules as equating to immediate access without any caveats and can become very frustrated when they view providers as ‘holding on’ to their money unfairly. Fraudulent organisations have capitalised on this sentiment, encouraging consumers to hand over their savings without fully understanding the tax penalties incurred.

“I would urge any consumers to take a few simple steps if they are unsure of a caller. First of all, a person should never give out details to cold callers and should not be afraid to hang up. Furthermore, someone should especially distrust anyone calling that discusses an entitlement to a ‘free Government review’.  

“If someone is in any doubt about anything they’ve been told, they should call The Pensions Advisory Service in order to sense check any plans before signing anything. Lastly, never deal with firms who exert pressure for a quick decision - there are no 'good deals about to stop'.”

Individuals can access Fidelity’s Retirement Service at