Today the government has announced new measures to tackle pension scams. Guy Opperman MP, Minister for Pensions and Financial Inclusion, joins us as a guest author to explain more…
Pension savings are a personal investment in your future. They are your passport towards a financially secure retirement.
But research shows that every second an average of eight people in the UK are being targeted by cold callers who are after their hard-earned savings. That’s an equivalent of 250 million calls per year.
And sadly, according to new figures, an estimated £43m has been unlawfully obtained by scammers since April 2014, with victims having lost an average of nearly £15,000.
Action on pensions scams
So today we’re announcing a number of new measures to better protect savers. These measures include a ban on all pensions cold calling, and that extends to emails and text messages too.
We’re also tightening HM Revenue and Customs rules to stop scammers opening fraudulent pension schemes, and will be taking tougher actions to help prevent the transfer of money from occupational pension schemes into fraudulent ones.
Having carried out a detailed public consultation, these new measures will be introduced to cut off private pension scams at their very source and protect savers from the threat of unscrupulous scammers – a cause that Which? has been campaigning hard for.
Once introduced, I want to reassure you all that these measures will ensure that no legitimate firm without an existing customer relationship will be able to cold call you about your pension.
This will cut off the main mechanism used by scammers to persuade people that they are offering legitimate pension investments and services, and in doing so also reduce the number of transfers made to illegitimate schemes.
Being scam aware
While today’s announcement should provide assurance to you and millions of others, our advice remains to be scam aware and wary of any form of advice linked to your pension pot or cash lump sums.
To help you be scam aware, here are my eight top tips:
- 1. Hang up on cold callers: Often scammers will call out of the blue offering a ‘free assessment of your current pension funds’, or free financial advice, for example.They might invite you to ‘use your pension savings more wisely’ by transferring them into investment schemes – such as in properties overseas, storage companies or fine wines – offering low risks and high returns.No reputable organisation would ever do such a thing, so the chances are they’re simply laying the ground work to steal your money. If anyone contacts you out of the blue about your money, don’t talk to them. Just hang up!
- 2. Research, research, research: If an offer promises ‘guaranteed’ returns or seems too good to be true, it probably is. Be on your guard. Do your homework and check all the details before signing anything. Take a look at the Financial Conduct Authority’s (FCA) list of known scams.
- 3. Things aren’t always what they seem: Don’t be lured by smart brochures and professional looking websites. Scammers want to trick you and this is one way they do it. Check everything and seek reputable advice.
- 4. Don’t be rushed into a decision: Scammers will try to pressure you with time-limited offers and create a sense of urgency. Take your time to make all the checks you need, even if this means turning down an ‘amazing’ deal.
- 5. Friends aren’t always right: Don’t choose a scheme just because someone you know has. Some have fallen for scams simply because they’d been ‘recommended by a friend’. As with any important decisions, investigate the details.
- 6. Find out if the ‘advisor’ is FCA approved: Scammers can pose as pension advisers, so check to make sure yours is registered on the FCA’s website.
- 7. If in doubt, call The Pensions Advisory Service: You can call them on 0300 123 1047 or visit their website for free pensions guidance.
- 8. If you think you’ve been scammed, report it: You can report the scam to Action Fraud by calling 0300 123 2040. You should also contact your pension provider immediately as they may be able to stop a transfer. And nuisance calls can be reported via the Which? nuisance calls reporting tool.
So remember, if a financial deal sounds too good to be true, it usually is – make sure you question the call, hang up, research, report and together we’ll stop these criminals in their tracks.
This is a guest contribution by Guy Opperman, the Minister for Pensions and Financial Inclusion. All views expressed here are the Minister’s own and not necessarily those also shared by Which?.
Have you been cold called about your pension savings? What did you do?