Protecting our pensions

In this guest blog, Money Advice Service CEO Charles Counsell writes about the risk of pension scams, and explains how you can keep your retirement safe.

Last year alone £23 million was lost to pension scammers increasingly taking advantage of pension freedoms. Action Fraud received 253 reports from people falling victim to a pension scam, equating to on average loss of more than £91,000 each.

This is alarming news, not least because there is reason to believe that the real figure lost to scams could be much, much higher. When you consider that the Financial Conduct Authority (FCA) suggest 107,000 people aged 55 to 64 could have fallen victim in 2017, it is clear we are looking at a huge issue.

Those affected are ordinary people who have worked hard to safeguard their future by saving – often over the course of decades – to be able to look forward to and enjoy their retirement. People who, through the actions of scammers, are now facing retirement with no pension savings or the daunting task of saving from scratch all over again.

‘Don’t let others enjoy your retirement’

Every day, fraudsters are using increasingly sophisticated methods to mislead savers into parting with their pension.

How? It often starts with being contacted out of the blue – a phone call, email, text, or even social media – offering a free pension review, promises of high returns or help to access tax-free cash before the age of 55.

These scammers come across as experts, able to answer any questions confidently and backed up by legitimate-seeming websites, marketing and testimonials.

‘Protect yourself and others’

As pension scammers become ever more advanced in their methods, so must we. At the Money Advice Service (MAS), we encourage people to follow these important steps:

  • Be vigilant – reputable companies are unlikely to call you out of the blue, so if someone does be wary
  • Check – ensure you are dealing with a legitimate company by checking they are on the FCA register and that the contact details match
  • Seek advice – don’t be pressured into making a decision, consider seeking impartial guidance or advice
  • Report – if you suspect suspicious activity contact The Pensions Advisory Service, the FCA Consumer Helpline or visit fca.org.uk/scamsmart for help and guidance

If you, your colleagues or anyone in your social circle have agreed to transfer your pension and have any suspicion of it being a scam it may not be too late. Contact your pension provider straight away and they may be able to stop the transfer if it hasn’t taken place yet, or if you do not know your provider, speak to your company’s HR department.

‘Regulate and Educate’

Industry, government and pension providers all have a shared responsibility to protect pensions against fraudsters. For example, anyone requesting to transfer their pension will automatically receive a leaflet from their pension provider with guidance and tips on protecting themselves, while pension schemes now can’t transfer certain pension pots over £30,000 that contain important guarantees  unless a regulated financial adviser has signed it off.

MAS is also fully supportive of the Government’s commitment to introduce a ban on pension cold calling as soon as possible. The Government is currently consulting on the draft legislation to ensure it is as effective and robust as possible, and intends to lay the required regulations before Parliament this Autumn, which I look forward to seeing.

But to fully combat the issue, there is an important role to play in educating the public to be wary of the issues and savvy with their pensions. Organisations like MAS and the FCA provide handy tips to help spot potential scammers and make the most of pensions.

The Money Advice Service also provides free and impartial advice and access to the Retirement Advisory Directory for help finding FCA authorised advisors. Anyone wanting more from their pension shouldn’t wait to be contacted.

‘My final message’

When something seems to be too good to be true, it usually is. So remember, ‘don’t let others enjoy your retirement’.

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