Criminals are getting ready to pounce on unsuspecting savers when the new retirement reforms take effect, a pensions expert has warned.
Pension scammers are likely to be "evolving their tactics" to approach individuals who choose to take some or all of their pension fund as cash from April 2015, according to Jamie Jenkins, head of pensions strategy, at Standard Life.
The company believes those at retirement will be "far more exposed to losing their life savings to such scams, as the ability of pension providers to prevent transfers of funds into fraudulent, too-good-to-be true investments will diminish once the new freedoms come into force".
{desktop}{/desktop}{mobile}{/mobile}
Mr Jenkins said: "While providers will still be able to stop transfers from one pension to another, the new retirement freedoms will mean people may simply release their cash and then pass it on themselves to people running scams. "Criminals have adjusted their tactics to the new pension freedoms and no longer need to fool both the individual and their provider into transferring funds. We can expect those who take their pot as cash to be approached directly – via cold calling, emails, and other means – to entice them into legitimate-sounding investments.
"Those who choose to take some or all of their pension fund as cash should be vigilant about such approaches, and mindful that they bear the entire risk of investing in dodgy schemes without the protective umbrella of their provider."
Some estimates suggest pension-related scams have already claimed up to £500 million in savers' money. In such scenarios, victims were advised to "liberate" their pension savings from their existing scheme and into a fraudulent or non-existent scheme before they turn 55.
Many people were lured into such offers on the basis of exploiting a false 'legal loophole' that would mitigate any tax liability.
Providers can block the transfer of a member's pension fund into another fraudulent scheme by conducting "fit and proper" checks.
Standard Life has blocked around 400 suspicious transfers, totalling almost £14 million, and has blocked 18 such transfers in the last month.

Get FREE daily news summaries direct to your inbox. Sign up on the homepage now.

Follow us on Twitter  and get frequent news alerts @FPM_online.

Or follow Editor Kevin O'Donnell - @FPM_Kevin or staff writer James Nadal - @FPM_James.

For the latest Sipp, SSAS and retirement news visit our sister news site www.sippsprofessional.co.uk and on Twitter @SippsPro.