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| Liberation fraud 'triples' following pension freedoms | Liberation fraud 'triples' following pension freedoms |
| (1 day later) | |
| The amount of pension liberation fraud more than tripled in the month following the new pension freedoms, figures suggest. | The amount of pension liberation fraud more than tripled in the month following the new pension freedoms, figures suggest. |
| Action Fraud - part of the City of London Police - said members of the public reported losses of £4.7m in May. | Action Fraud - part of the City of London Police - said members of the public reported losses of £4.7m in May. |
| That compares to losses of £1.4m in April, and £932,000 in March. | That compares to losses of £1.4m in April, and £932,000 in March. |
| However Action Fraud said it was too early to conclude that the increase was a direct result of the introduction of new pension freedoms in April. | However Action Fraud said it was too early to conclude that the increase was a direct result of the introduction of new pension freedoms in April. |
| That is because victims may report the losses many months after they were actually defrauded. | That is because victims may report the losses many months after they were actually defrauded. |
| "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," said a spokesperson for Action Fraud. | "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," said a spokesperson for Action Fraud. |
| The pensions minister, Baroness Ros Altmann, agreed with that analysis. | The pensions minister, Baroness Ros Altmann, agreed with that analysis. |
| She said she was "not convinced" that the pensions freedoms have led to a rise in fraud. | She said she was "not convinced" that the pensions freedoms have led to a rise in fraud. |
| "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," she told BBC Radio Five Live. | "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," she told BBC Radio Five Live. |
| £60,000 losses | £60,000 losses |
| Pension liberation fraudsters typically contact those with pension pots, and persuade them they can release the money - for a fee. | Pension liberation fraudsters typically contact those with pension pots, and persuade them they can release the money - for a fee. |
| However they usually do not make it clear that by doing so, the victims can be subject to large tax bills. | However they usually do not make it clear that by doing so, the victims can be subject to large tax bills. |
| Anyone under the age of 55 is liable for tax on their liberated pension at a rate of up to 55%. Following the pension reforms, which came in at the beginning of April, those over 55 are liable for income tax on 75% of their savings. | Anyone under the age of 55 is liable for tax on their liberated pension at a rate of up to 55%. Following the pension reforms, which came in at the beginning of April, those over 55 are liable for income tax on 75% of their savings. |
| Anyone whose income exceeds £150,000 in one year- including the amount taken out of their pension pot - could have to pay up to 45% in tax. | Anyone whose income exceeds £150,000 in one year- including the amount taken out of their pension pot - could have to pay up to 45% in tax. |
| The losses reflect the amount the victims owe in tax, plus the fee they have paid to the fraudsters. | The losses reflect the amount the victims owe in tax, plus the fee they have paid to the fraudsters. |
| The figures show that, on average, victims lost £60,500 - in some cases more than half their pension. | The figures show that, on average, victims lost £60,500 - in some cases more than half their pension. |
| How to avoid being scammed | |
| However, even though the amount of fraud has increased, the number of cases being reported has actually fallen. | However, even though the amount of fraud has increased, the number of cases being reported has actually fallen. |
| There were 78 cases of reported fraud in both May and April, down from 82 in March, and 240 in February. | There were 78 cases of reported fraud in both May and April, down from 82 in March, and 240 in February. |
| Project Bloom has been set up by the government to try and combat such pension fraud. | |
| Further tips on how to avoid being scammed are available on the Serious Fraud Office website, as well as elsewhere. |