UK: £200m lost in pension fraud as families fail to report deaths

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UK: £200m lost in pension fraud

as families fail to report deaths

By Thair Shaikh
News Telegraph, May 18, 2003

UK - More than 100,000 people are claiming pensions for relations who have died, an investigation into pension fraud shows.

The audit found that one in 100 spouses, close relations or friends regularly fail to tell pension schemes and continue to receive money.

The findings suggest that the scale of fraud far exceeds government estimates and could cost taxpayers more than £200 million a year in false claims. Until now, such frauds were considered rare and thought to amount to no more than £20 million a year.

The figures were obtained by a pension fraud team from BDO Stoy Hayward, the accountants, and Keypoint Services, a corporate investigations company. The unit studied 30,000 accounts across several private sector pension funds over two years.

The research found that one per cent of pensions were still being paid after the beneficiary had died. Although in most cases the fraud lasted only for a few months, the team uncovered instances when pensions were paid for years.

There are presently 11 million pensioners claiming £44 billion in state pensions each year. Some 7.5 million people also have company or occupational top-up pensions. In most cases, recipients only sign a form once a year to state that they are still alive and are entitled to receive the money.

The most common fraud involves forging the signature on the "certificate of existence" and allowing the money to keep coming. Often, carers have been given access to the recipient's bank account or pension book to access the money on their behalf.

Andrew Durrant, the head of BDO Stoy Hayward's fraud investigation team, said: "The figures surprised us. We estimate that, overall, about £200 million is being paid each year to deceased claimants.

The financial pressures that people find themselves under after the death of a family member can sometimes tip normally honest people into taking illegal measures."

In 1998 the Benefits Agency said that it would put extra security measures in place after Mary Walker, from Liverpool, was found to have pocketed £61,957 over 17 years by using her dead mother's pension book.

Mrs Walker was only caught when an official from Buckingham Palace tried to contact her mother to arrange for a 100th birthday telegram to be sent from the Queen.

Despite these assurances, Mary Grant, 69, was convicted last week of stealing more than £21,000 from the state and private pensions of a dead aunt.

Her crime came to light when an official visited her aunt's address to arrange for a 100th birthday message from the Queen.

A spokesman for the Department for Work and Pensions said: "We take this very seriously. This is taxpayers' money. We are making it harder for people to commit this type of fraud by cross-checking information with other departments.

"We are also sent the details of the registration of deaths from the Office of National Statistics and we have set up a new intelligence unit to counter fraud."