80% of pension transfer requests fraudulent
13/07/2015
Research from Aegon, the retirement specialist, shows that 80% of all requests for overseas pension transfers it receives are scams, designed to defraud savers out of their pensions.
Throughout 2015 so far, Aegon has prevented around 80% of transfers to Qualifying Recognised Overseas Pension Schemes (QOPS), which customers had unwittingly authorised, as they were discovered to be fraudulent.
QOPS are used when a UK resident wants to emigrate and take their pension with them, and can be a perfectly legitimate way to transfer money. However, recently, they are being marketed by unregulated companies who take the money out of the country, while taking a cut to cover administrative fees. Once the money is overseas, it’s possible the victim will lose their entire pensions savings. If it is not lost forever they may face a tax bill of up to 55% and other additional fees when the pension pot is repatriated.
Fraudsters are targeting small pensions of under £30K, and promising to carry out a pension review, before transferring the funds overseas.
Kate Smith, Regulatory Strategy Manager at Aegon UK, said:
“The new pension freedoms have given people far greater choice about how they access their pension, but unfortunately this has opened the door for scammers.
“Fraudsters are not only plausible but are also highly persuasive and it can be all too easy to fall for their polished performance, unless you are on your guard. We’re seeing more and more sophisticated ways of unscrupulous people getting their hands on people’s retirement savings and it’s not just the over 55s who are being preyed on, younger customers are being targeted too.
“We’re determined to protect our customers and crack down on the growing cases of fraudulent activity, but we need customers to be more aware and ever vigilant. Before signing any paperwork, it’s vital to question whether you fully understand what you’re signing for and bear in mind it might not be what you’ve been led to believe. If in doubt don’t sign.”
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