July 2015
Pension scammers are targeting a significant number of retirees since the pension freedoms came into force in April.
According to the latest YouGov research carried out on behalf of Retirement Advantage, 1 in 5 over 50s have been approached by scammers offering so-called ‘get rich quick’ schemes via legal loopholes or one-off investment opportunities.
Around half of those have been contacted through cold calling, 24 per cent via post and 23 per cent through email or other online methods.
The YouGov sample of just over 1,000 British adults found that 17 per cent of the over 50s and 20 per cent of the over 55s have been actively targeted to date.
David Parfett, Senior Corporate Pension Consultant at Aon Employee Benefits said: “The initial approach of scammers is often an out-of-the-blue phone call, text or email, a doorstep caller or even via an imitation website. Scammers may offer ‘one-off investment opportunities’, ‘free pension reviews’, ‘legal loopholes’ or a ‘cash bonus.’ The recently-introduced pension freedoms significantly increases these risks, so the public need to be clearly advised that they should never to be rushed into making decisions.”
Earlier this year, the Financial Conduct Authority published advice on how to spot (and avoid) investment scams.
Andrew Tully, pensions technical director at Retirement Advantage warned that scammers were actively ‘preying’ on those who might want to take advantage of the pension freedoms by withdrawing large amounts of cash from their 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,” he said.
Professional financial advice will be crucial in ensuring people understand the options available as well as making the right decisions to their personal circumstances, he added.
In particular, Retirement Advantage has highlighted five key things to be alerted to:
- Offers of help to access pension savings prior to age 55
- Recommendations to withdraw large sums of money and invest it
- Warnings that the deal is limited and requires immediate action
- Encouragement not to talk to Pension Wise or seek professional financial advice
- Encouragement to contact somebody not in the Financial Conduct Authority (FCA)
Parfett added: “It is clear that scammers are developing increasingly sophisticated and adaptive methods to avoid detection by pension schemes and members, so a collaborative approach to tackling the problem as well as raising awareness of the dangers is crucial.”
Aon UK Limited is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales. Registered number: 00210725. Registered Office: The Aon Centre, The Leadenhall Building, 122 Leadenhall Street, London EC3V 4AN.