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Pension liberation fraud triples


The amount of fraud related to pension liberation more than tripled in the month after the introduction of the pension reforms, according to a report from Action Fraud.

The figures suggest that members of the public reported losses of £4.7 million in May, compared to losses of £1.4m in April, and £932,000 in March.
Although these figures look to be in relation to the introduction of the new freedoms, action fraud has claimed it is too early to make this assumption. That is because victims may report the losses many months after they were actually defrauded.

Pension liberation fraud is carried out by fraudsters contacting people with pension pots and persuading them that they can release the money. They then charge a fee and don’t make it clear that victims may be subject to large tax bills. The losses are worked out by the amount the victims have to pay in tax, as well as the fee they had to pay to the fraudsters.

A spokesperson for Action Fraud said:
"With regards to the recent pension reforms, and the effect that this will have on pension liberation fraud, it is at this stage difficult to draw any conclusions."

Ros Altman, the Pensions Minister, agrees:
"People are a lot more aware of it, and are starting to report it. It can take a long time for people to realise they've lost their money."

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