Flexible access pension rules have opened the floodgates for scammers trying to get their hands on retirement savings.
Financial advisers and investment firms have stepped up their marketing in a bid to grab a share of the pie, but how can you spot a rogue from a genuine opportunity?
The new rules allow anyone over 55 years old to draw their pension savings to spend how they wish.
The fear of financial firms who want to hang on to the cash because they earn massive profits from managing the funds is their customers will take the money and look for better returns elsewhere.
Of course, one way they could simply stop this is by offering better investment returns, but no one seems to be making that move.
Tell-tale signs of a scammer
Regulators, such as the Financial Conduct Authority (FCA) and police are warning that scammers are lurking to steal the life savings of well-meaning investors.
Spotting a fraudster is not too hard – providing you know what you are looking for and know how to go about playing a sleuth.
- If you receive an email, telephone call, test message or letter out of the blue from a financial firm you have no contact with, then the message is probably from a scammer because regulated financial services firms are not allowed to cold call
- Scammers are likely to offer investments with eye-watering returns that seem too good to be true and try to get you to sign up with bully-boy tactics, such as threatening to withdraw the offer if you do not sign on the dotted line right away
- Man are offering ‘free government pension reviews’ – but these do not exist and are an opening hook to grab your attention from a fraudster
- Pension firms work on average returns of around 5% a year – if you have someone offering a better return on investment then be careful. Better returns are out there, but few generate higher profits.
- Beware overseas investments and exotic schemes like land banking, carbon credits and holiday resorts. They are almost always frauds and once your cash goes offshore, it’s likely impossible you will see it again
If you suspect you are talking to a scammer, check out their credentials with the FCA or report the details to the official police web site Action Fraud. Not only will you safeguard your money, but you will help the authorities protect others as well.
