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One in five over 50s targeted by pension scams

by: Mortgage Solutions
  • 01/07/2015
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One in five over 50s targeted by pension scams
One in five people over the age of 50 has been targeted by scammers looking to trick people out of their pension savings, a survey reveals.

The research by Retirement Advantage 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 instance through legal loopholes or a one-off investment opportunity.

More men than women report being targeted, with 22% of men aged 50 or over saying they had been approached compared to 10% of women.

The most common method of contact was by telephone (50%), followed by post (24%) and then email / online (23%).

Andrew Tully, pensions technical director at Retirement Advantage, said: “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. 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.”

Advisers can put their clients on guard with these five tips for spotting a scam:

An offer to help you access your pension savings before age 55. It is only possible to do this in rare situations, for instance if you are very ill, so be careful and always check with your pension provider.

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.

Warnings that the deal is limited and you must act now. Choosing the right retirement income product(s) is a big decision and shouldn’t be done quickly or under pressure.

An encouragement not to get professional financial advice or talk to Pension Wise. 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 this is discouraged.

Contact by somebody who is not on the Financial Conduct Authority (FCA) 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.

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