According to Phoenix, hundreds of customers who tried to transfer their annuities through pension liberation schemes were at risk from scammers. The fraudulent schemes offer incentives – such as early access to pension savings – to encourage people to move their pensions into another scheme.
However, a spokeswoman from the company said a number of instances were “flagged as suspicious”, and a “barrier” was put up to prevent customers being conned out of their money.
“Substantial tax charges”
“Unfortunately the new freedoms are likely to encourage more instances of customers being targeted by fraudsters,” said Phoenix. “We have been proactive in highlighting this issue within the industry, media and with our customers to ensure we help them get maximum protection from losing their hard-earned savings.
“Had these cases proceeded, customers could have suffered substantial tax charges and high administration fees and potentially could have been left with no pension upon retirement.”
Over the years, the firm said it has prevented more than 1,000 people losing a total of £22m.
The UK will introduce new pension freedoms in April this year.
Phoenix added: “2015 is likely to be a challenging year for us and for our customers as we all get to grips with the pension reforms.
“We have therefore been increasing operational capacity and the skill levels of our colleagues to ensure we are in the best place possible to react to these challenges.”
“Strong year”
This news comes as Phoenix announced its full year results, which indicated a 31% fall in cash generated from its operating companies’ to £567m from £817m in 2013.
However, it said 2014’s figure was at the top end of the £500-550m target range, while a further £390m had been received following the sale of its subsidiary business, Ignis Asset Management, to Standard Life Investments. This bolstered the company’s full year cash generation to £957m.
Operating profit was also up £483m, from £439m in 2013.
Phoenix said one of its “operational highlights” was the distribution of £185m of estate to 95,000 policyholders through final bonuses on their with-profits policies.
In a statement chief executive Clive Bannister said: “2014 was a strong year of performance for Phoenix. We met or exceeded all our financial targets, while making considerable strategic progress, significantly reducing our gearing level and achieving a comprehensive debt restructuring.
“All of this leaves the group in a sound financial position as we transition to Solvency II, enabling us to focus our efforts on seeking an investment grade rating and growing Phoenix through closed life acquisitions, thereby delivering more value to both customers and shareholders.”
