As many people over the age of 55 start to think about how they will take advantage of the new pension freedoms, one in five (20%) has admitted that they would treat themselves to a dream holiday or a new car. This is particularly the case among men (24%).
Research, conducted by Experian, has indicated how the over 55’s intend on spending their pension funds. In addition to the 20% who plan on treating themselves, 55% are unsure on what they will do, particularly women (62%). Over two in five (42%) suggest they will reinvest in some way. To aid their decision over half plan on conducting their own online research – whilst nearly a quarter intend on paying for financial advice.
With over 20.8m pension policies currently in force, and over £2.5 billion withdrawn from pension pots in the first 3 months of the new reform* – there is a huge level of risk for both customers and the provider. Over a third of those interviewed for the research have expressed a concern over the threat of fraud to them and a fifth believes it to be the responsibility of the pension provider to protect them. Recent figures from the City of London Police show that between April-August 2015 £9.1m worth of pension scams were reported in the City compared to £4.5m for the whole of 2014, a significant increase of over 100%.
Pensioners being victims of identity fraud isn’t new and is a topic we have talked about before. However the scenario of fraudsters stealing the identities of pensioners, in a bid to access their pension pots, is new. In addition to identity theft, fraudsters are offering to invest the cash into scams that can seem very convincing. Both scenarios highlight how ,more flexible access to pension pots has unleashed new vulnerabilities.
To find out more about emerging trends, and the actual cost of fraud in the UK, simply click here. Our fully interactive fraud analysis tool also covers all the latest fraud statistics and insights, including how, who and where it’s taking place, along with an overview of new and emerging fraud trends.
*Association of British Insurers, UK insurance and Long Term Savings Key Facts 2015