Pension savers are being urged to ‘scamproof their savings’ as part of a campaign launched today by The Pensions Regulator ahead of forthcoming changes to the law.
To date, under-55s have been the primary target for scammers promising to be able to release people’s pensions as pension loans or upfront cash. But, from April 2015, new flexibilities will give people aged 55 and over more freedom over how they access their pension pot.
People approaching 55 may be contacted by scammers seeking to exploit people’s interest in the change in law, for example by enticing them to move their cash into bogus, unregulated investments or other forms of scams.
The Pensions Regulator has refreshed its scorpion campaign to alert retirement savers and pension scheme trustees to the risks, produced in partnership with regulators and Government partners to tackle scams. It offers advice for savers on how to spot a scam, and what to do if they have been contacted by a suspect organisation.
The scorpion campaign also provides guidance for pension scheme trustees, including a check list of scam hallmarks, and signposts to a new code of good practice that sets out due diligence processes to combat pension scams. It calls on trustees to encourage members to contact Pension Wise, the new Government service aimed at helping those approaching 55 to understand their options.
Minister for Pensions Steve Webb said: “You can spend years saving into a pension only to find yourself tricked out of your money in the blink of an eye by these unscrupulous crooks.
“We are taking tough action along with our partners to tackle this scourge, but people must be vigilant. To get genuine guidance on your options, people should contact the free and impartial Pension Wise service.“If you are cold called by someone offering you a free pensions review, it’s probably a scam so put the phone down.”
The Pensions Regulator’s chief executive Lesley Titcomb said: “Scammers will try to flatter, tempt and pressure people into transferring pension funds into an investment with guaranteed returns, most of which will be bogus. Consumers can help to scamproof their savings by using our new scorpion campaign material, talking to the Government’s new Pension Wise service or consulting an FCA-regulated financial adviser before making an irreversible decision.
“The people behind pension scams are often agile, sophisticated and organised. Whatever the law is, they will seek to exploit it – so we expect the scams we see to continue to evolve in light of the new flexibilities available. Arm yourself with the right information and never make a hasty decision. Once the transfer has gone through, it’s too late.”
Head of Action Fraud, Pauline Smith said: “Fraudsters are continually looking for new ways to make criminal capital and the new pension reforms could provide them with another avenue to exploit in the coming months. First and foremost, if you’re ever cold called by someone offering an investment opportunity the best course of action is to play it safe and put the phone down immediately.
“If you need information about the pension reforms, seek guidance and ensure you check all of the facts before you make an irreversible decision. A lifetime’s savings can be lost in just moments. If you do become a victim please ensure that you report it to Action Fraud”.
Read more on the Pension Regulator website.
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To report a fraud and receive a police crime reference number, call Action Fraud on 0300 123 2040 or use our online fraud reporting tool.