Stephen Timms MP said this shake up of the pensions system gave millions of savers more freedom to plan for their futures but also has created more potential for the unscrupulous to take advantage. It has opened new avenues for them to scam savers out of what will very often be their largest financial asset, “crippling their dreams of a comfortable retirement”.
Handing savers total freedom and choice over how they spend their pension pot from age 55 was always going to make them a prime target for pension scammers, according to Tom Selby, of pension provider AJ Bell.
Mr Selby said: “Given fraudsters usually, by definition, operate outside of regulatory boundaries, the most effective way to protect people is to arm them with the information they need to avoid falling victim in the first place.”
Victim Sue Flood, 61, of Billericay, and her husband lost a combined £250,000 to fraudsters after they took advice to transfer their deferred final salary pension pots to a different scheme.
Mrs Flood, who has been active in calling for increased protection for savers over the last decade, said that real change will only happen if all regulatory bodies come to the table to address the “systemic failures which facilitated victims’ losses”. Only through cooperative work across authorities will the Government be able to protect future generations and restore confidence in the pensions market, she said.
British victims of pension scams lose an average of £155,000, according to a study by APJ Solicitors.