While pension freedoms have undoubtedly given people more flexibility and choice when it comes to planning for their retirement – recent evidence also shows that the number of people being scammed since their introduction three years ago has grown.
A recent survey (from Prudential) revealed that 9% of over-55s said they have been approached about their pension funds by people they believe to be scammers. And 33% of over-55s say the risk of being defrauded of their savings is a major concern following the pension freedoms.
We all think we’d notice a scam – but they can be quite sophisticated and convincing in their approach and they will try to catch you unawares with tempting deals.
The tactics commonly used to defraud people of their retirement savings include offers to unlock or transfer funds, and the offer of alternative investments. Unsolicited phone calls, text or emails about your pension are nearly always scams. And even if you’re approached by a friend or neighbour you know well who tries to talk you into an investment – check everything yourself. Do your homework, even if you consider yourself or your friend to be financially savvy.
In a previous blog we wrote about a scam involving ‘truffle trees’, now a recent story in The Mirror reveals that thousands of British savers are being ‘conned out of millions of pounds in a wave of airport parking investment scams, designed to part them with their pension cash’.
It seems that middle-aged workers are being cold called by people who advise them to move their retirement savings into Self-Invested Pensions Plans (SIPPS) which include rogue investments such as airport parking. Allegedly, they are then sold parking spaces at £25,000 a time at airports around the UK under the guise that they can then lease them out to a tenant. Unsurprisingly, the majority of cases are being found to be false and are now being investigated by both the Financial Conduct Authority and the police.
The advice is to be sceptical of investments that offer unusually high rates of return or which invest in unorthodox products that may be difficult to understand.
As we always say at The Goodman Partnership – if it sounds too good to be true, then it probably is…
Worryingly, according to this report, only 18% of those approached by suspected scammers reported their fears to authorities. If you think you’ve fallen foul to a scam, then we’d suggest you call Action Fraud on 0300 123 2040 to report it. If you’re a client of ours, then call us too, as we can potentially step in to stop a transfer that hasn’t already taken place.
If you are looking for an adviser, make sure that they are registered with the FCA, as this will give you additional peace of mind. At The Goodman Partnership we are registered with the FCA and have other accreditations too, which you can view on our website.
For more information about planning for your retirement or to receive a copy of a document providing advice about being scammed, which has been produced by The Pensions Advisory Service, give us a call on: 01892 500 600.