Pension freedom provides opportunities. But it also increases the danger of being hoodwinked by fraudsters eager to get their hands on your lifetime savings.
Financial regulators have issued what they consider essential fraud prevention advice for retirees ahead of sweeping pension reforms next month.
They should reject cold calls, hang up immediately, don’t get drawn into a conversation the people calling you are professional cold callers who know how to entice you into their schemes.
The FCA highlights the following signs that should put people on the alert:
* People offering high risk investments or scams will often cold call, but FCA-regulated firms are very unlikely to do this so the safest thing to do is hang up.
* Fraudsters might make contact unexpectedly about an investment opportunity but pretend they aren’t cold calling you, by referring to a brochure or an email that they have sent you. They might make a cold call, email, or follow up call after you receive a promotional brochure out of the blue.
* Another warning signal is if someone applies pressure to invest in a time-limited offer, for example by offering a bonus or discount if you invest before a set date, or by saying that the opportunity is only available for a short period.
* A dodgy firm might downplay the risks to your money, for example by talking about how you will own actual assets you may sell yourself if the investment doesn’t work as expected, or by using legal jargon to suggest the investment is very safe.
* Beware of promises of tempting returns that sound too good to be true, for example by offering much better interest rates than those offered elsewhere.
* Fraudsters might call you repeatedly and stay on the phone a long time. They could say that they are only making the offer available to you, or even ask you to not tell anyone else about the opportunity.
The FCA’s other tips are to check its warning list of companies running scams or operating without authorisation, and to get impartial help from a financial adviser unconnected to the firm that contacted you.
Article written by Christina Brady, Regional Manager Costa Blanca
“Fortunate, indeed, is the man who takes exactly the right measure of himself and holds a just balance between what he can acquire and what he can use.” These words, written by The eighteenth century English physician and educator Philip Latham, could just as easily have been written about trying to achieve the balance between spending happily in the present and saving prudently for retirement.
Since the UK government introduced pension reforms in 2015, there has been a huge increase in pension scams with unscrupulous firms targetting the over-55s with advice regarding what they can do with their retirement savings. Statistics issued by the Pensions Regulator in January, show that, on average, victims of scams lost £91,000 in 2017.