Pensioners are being warned about the rise of scams targeting their savings in advance of April’s ‘Pension Freedom Day’
The Association of British Insurers (ABI) and The Pensions Advisory Services (TPAS) have launched a social media campaign alerting people to the dangers of cold callers offering a pension review.
April’s changes give people more freedom over what to do with their pension pot and the scammers are taking advantage of confusion surrounding the new options for receiving retirement income.
To help you cut through the confusion and avoid the scammers, Which? has created a guide outlining all the income options for retirement under the new rules and what choice is likely to be most suitable for you.
Here, we highlight five of the best tips offered by ABI and TPAS to help you avoid falling for fraudsters’ tricks.
1. Be wary of cold callers
It pays to be suspicious if anyone calls you out of the blue to offer you a money-making deal.
If someone calls you, always ask to call them back. Reputable companies will always be happy to let you do this, whereas scammers tend to be more wary about giving contact details.
Any review of your pension should be conducted by a regulated financial adviser and very few of these make cold calls.
2. Check out the company
Check the Financial Conduct Authority’s register of regulated financial services providers. This will tell you if the company is registered as well as listing any companies being investigated.
Any company claiming to be government-endorsed is not telling the truth. The government is launching an official pension guidance services, ‘Pension Wise’, but it is not up and running yet.
Find out more: What is the pension guidance guarantee? – make the most of this free service
3. Recognise fraudsters’ behaviour
Telephone fraudsters often describe their offer as a ‘legal loophole’ or a ‘once-in-a-lifetime opportunity’. Typically, they will try and send couriers to your home address within a day of calling you. This type of behaviour should set alarm bells ringing.
You should also be wary of any deals which sound to good to be true. Offers of 8% or more guaranteed investment return should make you suspicious.
4. Know the facts
Many telephone scammers claim to be able to provide immediate access to your pension or a tax-free lump sum worth more than 25% of your pension fund.
The truth is that accessing your pension savings before age 55 is only allowed in special circumstances, such as severe ill health.
Find out more: Should I take a lump sum from my pension? – the rules about withdrawing cash
5. If in doubt, contact an expert
The Pensions Advisory Service has urged all consumers who are suspicious about any pension-related offers to give their experts a call on 0300 123 1047.