The information provided in this article was accurate at the time of publishing and should be read in the context of the date it was published. Views in this article are those of the author alone and do not necessarily represent the view of Scottish Friendly.
We at Scottish Friendly have consistently warned about the dangers of predators hovering around vulnerable pension plan holders looking for the right time to pounce and run off with hard earned pension savings, leaving savers absolutely devastated.
It’s increasingly clear much more needs to be done by the government, regulators and the industry to alert people about pension predators. The City of London Police has reported that fraudsters have taken more than £9m from pension investors in the five months since April in pension liberation scams, twice the sum taken in the same period last year. We at Scottish Friendly are concerned that the figures from the City of London police may just be the tip of the iceberg.
It’s a gut-wrenching situation for people to find themselves in and the government and industry has to act to warn people of the perils. We need to arm savers with the right information so they can be more vigilant to the techniques used by these crooks.
Most people know that if something sounds too good to be true, then they should steer clear. However, the problem is that many of these pension predators are able to disguise themselves as reputable and credible. Pension freedom has been, rightly, welcomed but we have to do more to ensure that it is not blighted.
Below are 5 ways that savers can spot the scammers and protect their pension.
1. Be wary of people or companies claiming knowledge of tax loopholes, offering to unlock your pension before age 55 or promising to secure extra tax savings that are outside the current pension rules and regulations.
2. Watch out for individuals or companies offering very high returns from overseas or ‘unusual’ investments.
3. Beware companies that attempt to rush you into making decisions. If they are applying pressure to transfer funds or send documents quickly and you feel unsure contact The Pensions Advisory Service (TPAS) before making a decision. www.pensionsadvisoryservice.org.uk
4. If you are approached out of the blue over the phone, via text message or in person door-to-door or the firm in question only has a mobile number, a website or a PO Box number as contact details then be cautious.
5. Check that the firm you are dealing with is registered with the FCA before signing anything. You can also check the FCA’s Scamsmart warning list www.fca.org.uk/scamsmart The list contains the names of known investment scheme scams.
More information can be found on the Pensions Wise website: www.pensionwise.gov.uk
No advice has been provided by Scottish Friendly. If you are in any doubt as to whether a savings or investment plan is suitable for you, you should contact a financial adviser for advice. If you do not have a financial adviser, you can get details of local financial advisers by visiting www.unbiased.co.uk. Advisers may charge for providing such advice and should confirm any cost beforehand.