The pension freedoms may be giving retirees more freedom when it comes to spending their pot, but they've also opened up more opportunities for scammers to try and access that money for themselves, and a growing number of people fear they've been targeted.
Research from True Potential has revealed that 16% of over-55s surveyed believe they've been offered rogue investment opportunities designed to scam them out of their retirement fund, with more men than women believing they've been targeted (20% and 10% respectively).
The pension freedoms are available to 400,000 people in the UK, so potentially, up to 64,000 people could have been exposed to scams. True Potential's calculations went on to show that, with an estimated £2.5bn having been withdrawn from pension funds since April, scammers could have walked away with £400m should their ruse not have been identified.
It's long been thought that the freedoms could "open the floodgates to scam opportunities", it said in the report, and these latest figures highlight the true scale of the problem. A worrying number of people could be exposed to such scams and, in turn, so could their pension funds, which shows just how vital it is to be on your guard, and to seek professional advice if you're offered any form of investment opportunity.
"Pension freedoms remain an excellent and revolutionary policy that we fully support," said David Harrison of True Potential. "The question is, how can we support consumers who wish to access their pension pot, so that they can make good decisions and not fall victim to scams.
"Access to professional financial advice has never been more important to help consumers reach their goals. 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 to make advice more accessible and affordable for everyone, or we will simply see more pensions scam victims in the future."
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