Below seemingly calm waters, there are steely-eyed predators seeking to snatch away your retirement money. Could you spot a pension scam?
Pension scammers have been encouraged to widen their net by the so-called ‘pension freedoms’ which came into effect in April 2015. The sad reality is that pension reforms – which have largely been positive for retirees – have also been a boon for criminals looking to relieve you of your money.
Under the new rules about how you can access your pension in retirement, it’s easier to take money out from the age of 55, so scammers are attempting to persuade people to invest their retirement savings in schemes that are either dubious or completely bogus. Taking an ad hoc sum from your pension now means it’s fairly simple for the money to find its way into a fraudster’s account.
So we’ve outlined some of the tactics used by scammers and key tips to keep your cash safe.
Fraudsters are changing their tactics to exploit the new pensions world. Pension investment scams are on the increase and the average loss to victims of pension fraud is around £40,000.
We found that many Which? members had received suspicious calls asking about their pension arrangements. Callers will often offer a free review of your pension, implying that they are connected to the Government and providing advice on the recent pension changes.
We also uncovered scammers posing as legitimate financial advice companies. The reality is that fraudulent activity aimed at extracting money from pensions is often initiated via unsolicited telephone calls or texts.
Tips for avoiding scams
Pensions scams are a huge problem, potentially impacting millions of savers and causing significant financial losses for those who fall victim.
Avoid falling victim to a pension scam by brushing up on these tips to help you spot one:
- Ignore unsolicited calls and texts about your pension
- Avoid firms using phrases such as ‘pension liberation’ and ‘cash in your pension’
- Avoid any companies suggesting you can get access to your pension before you reach the age of 55
- Never rush into agreeing a pension transfer and your current provider should check the HMRC registration of the new scheme
- If you’re unsure, speak to a financial adviser
Perhaps you’ve had a ‘near miss’ with a pension scam? What happened and what did you do?
Come and see us on Friday 8 July in Glasgow’s Buchanan Galleries where we’ll be providing free advice on how to safeguard yourself from scams.