Crooks sweet-talk you out of pension
ONE in five people over 50 have been targeted by rogues trying to swindle them out of their pension cash in the last three months.
The crooks typically offer a free pension review or an investment opportunity over the phone, by text or email.
Andrew Tully, pensions technical director at Retirement Advantage who researched the problem, said: “The pension freedoms have opened the floodgates for scammers and conmen to prey on people.
“These scammers are using increasingly sophisticated and convincing ways of trying to defraud large amounts of cash from people’s hard earned pensions and savings.
“Attempts by the industry and regulators to prevent scams is not stopping huge sums of money disappearing into the scammers’ pockets.
“My concern is the fraud and scams that get reported are only the tip of the iceberg because many people are unaware they’ve been conned or are too ashamed to come forward and report it.”
He added: “The Government, prompted by pressure from the financial industry, has promised to ban pension cold calling.
“This is a positive move, but we need to keep the pressure up to make sure this comes back onto the agenda as soon as possible.
“We all have a responsibility to be on constant guard, but the basic rule of thumb still stands, if an opportunity sounds too good to be true, it almost certainly is.”
5 THINGS TO BE WARY OF TO AVOID BECOMING A PENSION SCAM VICTIM
1 People offering you help to access your pension savings before the age of 55. It is only possible to do this in rare situations, for instance if you are very ill, so be careful and always check the rules with your pension provider. 2 A recommendation to take a large amount of money, or your whole pension pot, in a lump sum and invest it. There are significant tax implications if you take lots of your savings in one go, so check the tax position before you make any decisions (there’s a tax calculator at retirement-advantage. com/pension-tax-calculator). 3 Being rushed into making a decision with a warning that the deal is limited and you must act now. Choosing the right retirement income product is a huge decision and one that no one should do quickly or while being put under pressure. 4 Being discouraged from seeking professional financial advice or talking to Pension Wise or The Pensions Advisory Service. An adviser would be able to explain the rules and tax implications of different options and help you make the best choices for your personal circumstances, so be very suspicious if doing this is discouraged. 5 Contact from a firm or individual who is not on the Financial Conduct Authority Register. The Register is a public record of all the regulated firms and individuals in the financial services industry, including retirement income providers and investment companies. Check register.fca.org.uk.