We all know the importance of being on our guard against potential scams, but the recent pension reforms mean it's more important than ever to be vigilant. Having the freedom to withdraw your entire pot as cash means many unscrupulous individuals will want to help, and research has found that a growing number of over-50s are being targeted.
Research from Retirement Advantage has found that one in five over-50s may have been targeted by pension scammers, highlighting the need to be on your guard. The survey found that 17% of over-50s and 20% of over-55s have been approached by a company offering to help them access their pension early, for example through legal loopholes or a one-off investment opportunity, with the most common method of contact being telephone (50%), followed by post (24%) and then email/online (23%).
The problem is that some of these scams could sound legitimate at first, particularly to those who aren't fully aware of the rules surrounding the reforms. Then there's the possibility that some retirees could genuinely be looking for a way to invest their pension savings, so hearing about an investment opportunity could mean they're tempted to take the plunge. But, the same rule needs to apply here as much as with any other cold calling or phishing scam – if it sounds too good to be true, it probably is!
"It is clear that there are already scammers preying on people who might like the idea of using the new pension freedoms to take large amounts of cash from their pension schemes," said Andrew Tully of Retirement Advantage. "The scammers may be offering get rich quick schemes or even early access before age 55 to trick people out of their hard-earned savings. Retirees need to be on their guard: if an opportunity sounds too good to be true, it almost certainly is."
He added that the Government and financial industry needed to work together to "ensure all practical measures possible are in place to protect people from these scams", highlighting Pension Wise as a way to help educate retirees about the risks. But, don't wait – make sure you understand the rules and know what to look out for should you be contacted by one of these scammers, and hopefully your pension savings will remain intact.
To help you feel equipped to deal with potential scammers, Retirement Advantage has highlighted five key things you need to be on the lookout for:
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