January 16, 2015 1:47 pm
UK pensions reforms open door for scams
Fraudsters will take advantage of reforms that give people more control over their retirement savings, industry figures and regulators fear.Changes from April mean that retirees will no longer face the near-requirement to buy an annuity with their pension savings. About £4.7bn a year that previously entered annuities is expected to go elsewhere, according to analysts at Citi, a bank.
The sweeping changes come after the Financial Ombudsman, a complaints body, said it had seen increases in cases involving self-invested personal pensions (Sipps) and unregulated investment schemes, while a series of pension fraud cases have begun reaching UK courts.
“It is a racing certainty that fraudsters are going to make hay in this environment,” said Alan Higham, retirement director at Fidelity Worldwide Investment.