Fraud set to soar under new pension rules
It will be "open season" for fraudsters when changes to the pension rules make it easier for people to access their retirement savings next month.
That's the worrying conclusion reached by industry insiders who are concerned that many older Britons will fall foul of the scams.
Tom McPhail, pensions expert at financial adviser Hargreaves Lansdown told the BBC: "It's open season for the fraudsters targeting the over 55's, and some unwary investors are going to get drawn into these schemes."
Even pensions minister Steve Webb admits that there are "a bunch of crooks out there" waiting to part people from their pension savings.
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Pension freedom
Under existing pension rules, people can only transfer their retirement savings to another pension scheme.
Criminals trying to defraud them must therefore set up fake pension schemes to do so.
However, from the start of the new tax year on April 6, anyone over 55 will be able to withdraw their pension savings and put them where they like.
And the fear is that this will open the floodgates for unscrupulous fraudsters to trick people out of their savings.
There are already reports of people being bombarded with phone calls and text messages ahead of the April changes.
And according to FT Adviser, a massive 84% of employers believe their staff could be at risk.
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Advice for savers
In a bid to stop people falling victim to fraud, the government is advising them not to take cold calls from anyone claiming to be a pension professional.
"Pension Wise - our service - is the place to go. Not somebody who cold calls you," Webb said.
However, the Association of British Insurers believe that more needs to be done. "The government, regulators and industry need to work together to combat misuse of the pensions system," it said.
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