Five Questions On: Pension scams
Is this something to do with the Government's new proposals?
Only partly. The Pensions Regulator revealed last week that almost half a billion pounds has been lost by unsuspecting victims of pension scams. The news prompted experts to warn that fraudsters will use the new, relaxed pension that come in from next April to step up their activity.
How does the pension scam work?
The scam is simple. Unscrupulous firms claim that you can unlock your pension early, before you reach 55. But they don't tell you that if you do so, you risk losing up to 70 per cent of your savings through tax losses. Some further suggest that you use "legal loopholes" to move your pension pot into bogus investments that could even result in you losing your entire savings.
Who falls for it?
Anyone can. The scamsters are very persuasive. One 49-year-old victim facing an £18,000 tax bill and losing her home, after falling victim to the scam, said: "They target vulnerable people. Ignore the sales patter, ignore the glossy websites, ignore the cold calls and text messages."
Why will they be getting busier?
With the new relaxed pension rules coming in next year, fraudsters are likely to increase their activities to take advantage of consumer confusion, warned Duncan Buchanan of the Society of Pension Consultants. "Regulators need to be alive to the fact that we will see many more real-life examples of people being encouraged to invest their retirement funds in mirage investments."
What should I do if I think I've been targeted by crooks?
For more information, go to pension-scams.com. For help, call the Pensions Advisory Service on 0845 601 2923 or visit pensionsadvisoryservice.org.uk. You should report a pensions scam to Action Fraud on 0300 123 2040 or at actionfraud.police.uk
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