Pensions scam alert

The FCA and The Pensions Regulator are issuing a new warning against fraud after finding that 42% of pension savers – the equivalent of 5 million people – are at risk of falling for common tactics used by pension scammers. The likelihood of being drawn into one or more scams increased to 60% among those who said they were actively looking for ways to boost their retirement income. Pension cold calls, free pension reviews, claims of guaranteed high returns, exotic investments, time-limited offers and early access to cash before the age of 55 are all ways savers are tempted into risking their retirement income.

Yet those who consider themselves smart or financially savvy are just as likely to be persuaded by these tactics as anyone else. Pension savers were tempted by offers of high returns in investments such as overseas property, renewable energy bonds, forestry, storage units or biofuels. Nearly a quarter (23%) of the 45-65-year-olds questioned said they would be likely to pursue these exotic opportunities if offered them. Helping savers to access their pensions early also proved to be a persuasive scam tactic. One in six (17%) 45-54-year-old pension savers said they would be interested in an offer from a company that claimed it could help them get early access to their pension.

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