Pension scam victims pay thousands to firm hired to rescue their cash 

Huge hit: David Rhodes was charged £90,000 to rescue his £157,000 pension from fraudsters

Huge hit: David Rhodes was charged £90,000 to rescue his £157,000 pension from fraudsters

Huge hit: David Rhodes was charged £90,000 to rescue his £157,000 pension from fraudsters

Pension scam victims have lost millions of pounds more to the government-appointed trustees hired to get their money back.

The Mail previously revealed how tens of thousands of savers had lost up to £10 billion in rogue schemes that looked safe because they were registered by the HMRC and overseen by The Pensions Regulator.  But now, some of the victims of the government-sanctioned scam schemes have found that the trustees hired to recover their money from fraudsters have swallowed up much of their surviving life savings.

Victims say Dalriada Trustees ‘inexplicably’ held their recovered retirement savings for years and then only paid a fraction of their money back. One man who waited for seven years to have his pension pot returned had £90,000 of it deducted in charges — including £18,000 for ‘member’s information’, which consisted of one letter or email from the trustee a year.

Many others have been waiting for almost a decade for Dalriada to return their nest eggs that were rescued in full from scammers.

The Pensions Regulator and the High Court appointed Dalriada to take charge of more than 100 suspected scam pension schemes affecting more than 5,400 people and involving over £260 million in transferred retirement funds.

The independent trustee’s role is to investigate what happened with the rogue scheme, contact victims, try to recoup remaining funds and minimise any tax liabilities.

But research by the Mail has shown that in 12 Dalriada-run schemes where information is publicly available, the trustee took £3,558,819 in fees from members’ surviving funds between 2012 and March 2018. 

This does not include any extra administration costs such as legal fees or consultancy.

It means the total figure taken in fees for all the Dalriada-run schemes could run into tens of millions of pounds.

Probe: MPs on the Work and Pensions Committee have launched an inquiry into pension scams

Probe: MPs on the Work and Pensions Committee have launched an inquiry into pension scams

Probe: MPs on the Work and Pensions Committee have launched an inquiry into pension scams

Former managing director David Rhodes transferred his £157,000 pension to a scam scheme in 2012, but the entire pot was rescued before the scammers could get away with it. 

His joy at learning it had been saved turned to frustration and despair when it was held by Dalriada for seven years before he finally got just £67,000 back in September 2019.

David, 65, from Hornsea, East Yorkshire, says: ‘I was devastated. This is going to affect my standard of living during retirement and is a massive hit. I had to cut back on my travel plans, downsize my house and think about saving money.’

After emailing Dalriada 20 times over the years, David finally got a basic breakdown of what his £90,000 had been spent on: 60 per cent on legal fees, 20 per cent on administration and 20 per cent on ‘member’s information’.

He says: ‘All I got was one letter or later email from the company a year, so it seems an extraordinary amount to spend on information.’

Another former British Airways worker is still waiting to get back the £56,000 held by Dalriada after he transferred it to a scam scheme in 2011.

The revelations come as MPs on the Work and Pensions Committee have launched an inquiry into pension scams. 

Victims have told how they are treated like criminals and hounded for fees worth up to 40 per cent of the pension they lost.

Dalriada Trustees says it can take a long time to deal with cases because the schemes it takes over are usually complex with poor documentation.

Pursuing the recovery of lost assets and attempting to minimise the impact of tax liabilities on the schemes is often a time-consuming and costly process involving court hearings, as was the case in the pension scheme in Mr Rhodes’ case.

Sean Browes, from Dalriada Trustees, says: ‘Our team who specialise in this difficult area are always mindful of the members’ interests. 

Since 2011, Dalriada has secured the recovery of more than £30 million of members’ funds.’

A High Court judge has ruled a significant number of pension schemes can in principle make applications to the Fraud Compensation Fund. 

HMRC says that, since 2013, it has been able to use new laws to help detect scam schemes and comes down hard on scammers.

moneymail@dailymail.co.uk

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