July is Scams Awareness month and therefore a good time to remind people to be on their guard against pension scams.
A recent report from Citizens Advice found nine in ten people miss common warning signs – such as unusually high investment returns, cold calling and offers of free financial advice.
Scammers’ tactics are shifting away from pension liberation schemes offering high rewards towards free pension reviews and advice as a first step towards tricking people out of their pension pots.
Citizens Advice reminds us that to help clients and service users avoid becoming victims of a scam, we can raise awareness of the following warning signs:
- Ignore any contact received that is out of the blue about your pension. This could be in person, online, on the phone or in the post
- Watch out for any promotion offering you more than 8% return on your investment
- Be wary of any offer to access your pension before 55. Accessing your pension early can mean you are hit with a high tax bill of 55%, as well as losing any pension savings in a scam
- Don’t feel pressured to make a decision about your pension straight away
- Watch out for extravagant sounding investments based overseas
- Check the Financial Conduct Authority (FCA) online register to make sure the company approaching you is legitimate. If you are making an investment, check the FCA ScamSmart warning list for known investment scams
- If you are transferring a pension, ask your current provider to check the HMRC registration of the new scheme to check it is legitimate
If your clients are over 50, Pension Wise guidance can help them to understand the warning signs and to avoid falling victim to scam.
There are 50 local Citizens Advice delivery centres that provide face-to-face Pension Wise appointments at 500 locations across England and Wales. Members of the public can also go into any local Citizens Advice for information about Pension Wise and how to book a face-to-face appointment at a location nearest to them.
*Thanks to Manchester Citizens Advice for providing the information in this news item