22nd September 2015 at 8:39am
Having more flexibility and freedom thanks to recent pension rule changes can also mean there’s more opportunity for pension scammers.
In light of Pensions Awareness Day (15 September) we highlight the main signs to look out for and what can you do to protect yourself.
Trading Standards recently found a list of 200,000 potential victims during an investigation into the use of fraudulent mail to try to cheat people out of their savings.
Scams often involve people being enticed into releasing cash from their pension before the age of 55, which is normally only allowed when people are in serious ill-health.
However, since the new pension freedoms came into effect in April this year, pension scams have started to evolve into investment scams, targeting the cash lump sums that the over 55s can choose to take from their pension pot. Some of these scams are aimed at even the most experienced of investors and can include opportunities to invest in wine or property, for example.
What does a pension scam look like?
Pension scams can use phrases such as:
- early pension release
- free pension review
- a one-off investment opportunity
- legal loophole
- pension loans.
When should alarm bells ring?
The Pensions Regulator (TPR) has been running a campaign to raise awareness of pension scammers – are you aware of what should set alarm bells ringing?:
- cold calls, website pop-ups or doorstep visits from anyone offering you a ‘free pension review’ or ‘one-off investment opportunity’
- promotions that promise a high rate of return
- anything that claims you can access your pension before age 55
- transfers of money overseas
- being pressured into a short time frame – either for giving your details or signing documentation
It’s also important to look after your personal information – online, by email, over the phone and in person. Consider very carefully before you give anyone your:
- National Insurance number
- bank account details
- PIN numbers
- full credit card numbers
- your mother’s maiden name
- your birthday
- online login details or passwords
You can find out more about protecting your identity from Action Fraud.
Knowing who to trust when it comes to your finances
Always check you’re using a reputable, regulated body for financial advice or investments. You should be able to see if a company is regulated by looking closely at their website or marketing material – they should mention the Financial Conduct Authority (FCA) or The Pensions Regulator. But you also need to check whether their claims are true – that’s vital.
And, before making any significant financial decisions, consider taking financial advice. The information in this blog or any response to comments should not be regarded as financial advice.
We’re proud to support Pension Awareness Day on 15 September 2015, the annual, award-winning campaign designed to get people thinking more about saving for their future.