How to keep your money safe, Part 2: Scams possibly increasing

In our last entry, “How to keep your money safe, Part 1: Avoiding pension scams”, we explained some things to look out for to protect your pension from scams. This post looks at the findings from our recent survey of over 55s to see how people feel about the pension reforms, advice and recognising scams.

Scams can be convincing

Of the 1,000 people we surveyed, a huge 40% said they don’t feel very confident in being able to tell the difference between a scam and a legitimate offer. This is worrying, because…

More than half of the respondents thought they had been contacted by a scam

52% of people had been contacted by a company that they felt could be running a financial scam. In fact, almost a quarter (21%) have either been or known a victim of a financial scam, which highlights how important it is to stay alert and do some research before making a decision. More men have been contacted by a company they thought was running a scam than women – 60% and 45% respectively.

Scams may be on the increase – especially if you’re close to 55

Over a third of respondents (39%) claimed they had noticed an increase in the volume of pension-related sales calls since shortly before the pension freedoms took effect. Of those who had noticed an increase, almost half were aged 55-59, and the percentage dropped to 31% for those aged 65 or above.

One possible explanation for this could be pension release at 55. This is the earliest people can access their pension, and are less likely to have already purchased an annuity with their fund. Clearly the need to understand the true options is important, yet…

45% of people do not feel well informed about the new pension reforms

Fewer than half of women feel well informed about them, while nearly two-thirds of men claim to be well informed. This is concerning, as knowing what options are truly available is one of the best ways to stay safe from scams. 

A regulated adviser can explain the new rules, what they mean for you and how you can create a flexible retirement plan with them, however…

Almost a quarter don’t know where to go for accurate financial advice on the reforms

For those between 55 and 59, this increases to 28% not knowing where to get accurate advice. The percentage drops to 21% from the age of 60, but that’s still an awful lot of people. This could increase the risk of falling victim to a scam, especially as fraudsters often make themselves look as official as possible.

It’s essential to understand what you are and are not allowed to do to keep your money safe in retirement. The government’s Pension Wise guidance service can explain an overview, but regulated advice can take your personal circumstances into consideration.

If you are approached by a company offering advice or investments, check the FCA’s register or ScamSmart website to see if they are regulated.

Have you been or known a victim of a financial scam? Let us know with a comment below.

Call 0800 304 7288 for a friendly chat about your pension

The details provided in this article are for general information only and are in no way deemed to be financial advice. All of the material is correct as of the publication date, but could be out-of-date by the time you read the article. For our latest information and news, please see our articles section: https://www.portafina.co.uk/whats-new

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