There's now less than a week to go until the new pension reforms come into effect, but what does this mean for you? Well, while the changes herald new freedoms in the pensions landscape, they've also increased the risk of scams.
"This all sounds good, but pensioners must be on their guard, because this freedom is going to excite fraudsters who want to get their hands on your cash," said Rachel Springall, finance expert at Moneyfacts.
Fraudsters are always on the lookout for ways to trick you out of your hard-earned savings, and the new freedoms unfortunately give them plenty of opportunities to do just that. "In particular, retirees may get mail or a phone call about how to invest their pension cash, but there's every possibility that this will be a scam," said Rachel.
"If in doubt, you can check to see whether this is the case by using the new ScamSmart Campaign provided by the Financial Conduct Authority (FCA). You can also get in contact with an independent adviser who will be able to identify whether the proposed investment is authentic."
Unfortunately, there's always the chance that you won't realise you're a victim until things have gone too far. If you think you're being targeted by scammers then call The Pensions Advisory Service on 0300 123 1047, or if you've accepted an offer, call Action Fraud immediately on 0300 123 2040.
It isn't just the reforms on how you can access your pension that are coming into force – there's a whole lot more to be aware of! These additional changes include how you can pass your pot on to your loved ones, tax relief on additional contributions after taking money from your pension, as well as changes to the state pension. There are even proposals afoot that could allow you to cash in your existing annuity, but seek advice if you're considering this.
The website www.PensionWise.gov.uk should be the first port of call for anyone approaching retirement age, as it'll give you a thorough overview of the options available. It also has links to many of the websites mentioned above, with telephone numbers you can call. Of course, here at Moneyfacts we'll keep you up to date, too, and make sure to check out our guide on the pension freedoms so you fully understand the risks. Above all, be on your guard, and hopefully you won't be a victim of opportunistic fraudsters.
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