Pension Scams & How to Avoid Them

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Pension Scams & How to Avoid Them

The average amount of money lost, by victims of pension fraud in 2018, was £82,0000. Considering that this is only the average, it is a startling figure and it is also believed that a large amount of pension scams goes unreported or the victims may not realise they have been scammed for a number of years.

A recent FCA press release stated that “42% of pension savers between 45 and 65 could be at risk of falling victim to one of the six most common tactics used by pension fraudsters” this is based on research conducted by Census wise in June 2019.

Here are the six most common pension scams to be aware of;

* Pension cold calls

* Exotic investments

* Claims of guaranteed high returns

* Early access to cash before the age of 55

* time-limited offers

* free pension reviews

Many readers may not be aware that the government banned pension cold calls in January 2019. This means that if you receive an unsolicited call from somebody offering to review your pension provisions, they are breaking the law and it is likely a pension scam, unless the caller is authorised by the FCA, or is the trustee or manager of an occupational or personal pension scheme, and the recipient of the call consents to calls, or has an existing relationship with the caller.

The offer of being able to access your pension before the age of 55 or of exotic investments with high returns, unfortunately, prove to be the right hooks with which pension fraudsters catch potential victims.

It is also noted in the research that those that consider themselves “smart of financially savvy” are just as likely to fall victim to these types of pensions scams. Honey Langcaster-James, psychologist, stated that;

“Sophisticated scammers take advantage of this and use powerful psychological techniques to build trust and rapport and ultimately to influence our behaviour”.

Four simple steps to protect yourself from pension scams:

1. Reject unexpected pension offers whether made online, on social media or over the phone.

2. Don’t be rushed or pressured into making any decision about your pension.

3. Consider getting impartial information and advice.

4. Check who you’re dealing with before changing your pension arrangements – check the FCA Register or call the FCA contact centre on 0800 111 6768 to see if the firm you are dealing with is authorised by the FCA.

If you are considering reviewing your investment or pension provisions and you are starting to build a financial plan for your future, it is important that you take time to research the company or adviser you are working with.

At Wingate we pride ourselves on putting our clients at the heart of the advice we provide. We ensure that we adhere to the principles of the Pension Transfer Gold Standard as outlined by the Chartered Insurance Institute and we have been recognised with a wider range of awards from independent publications in recent years, including – Best Individual Pensions Advice Firm of the Year – Retirement Planner – 2019.

If you, or somebody you know, are concerned about the risks outlined above and you are looking to speak to a highly regarded, long-established firm of financial advisers, then please do not hesitate to contact us directly at Wingate.

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26 Apr 2024

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