Pensioners are being targeted by unscrupulous fraudsters, who use an increasing array of techniques to cheat them out of a lifetime of savings. The scammers are already destroying the lives and retirements of thousands of innocent victims, but the experts warn that the reforms being brought in this April will mean the criminals can do even more harm.
Research by MetLife found that overall 9% of pensioners have been targeted by fraudsters. This rises to 14% in the South West, 13% in Wales and 11% in London. The criminals use a number of approaches in order to cheat people out of their savings and their income.
The Pensions Advisory Service has released a list of warning signs that you are being targeted by scammers for your pension. They warn of common 'hooks', which are sure signs you are being drawn into a scam. These include offering people a 'free pension review'; suggesting they can offer 'immediate access to cash'; saying they can free up more tax-free cash than 25%; or offering a loan against your pension so you can enjoy the money early.
They have also identified common 'hustles', which include contacting people by email, phone or letter out of the blue; claiming their service is part of a 'government initiative'; suggesting it's part of an established annual review; or mentioning a 'legal loophole' - which doesn't exist. The scammers may also send round couriers to pick up documents.
Michelle Cracknell, Chief Executive of the Pension Advisory Service explains: "Pension scams are becoming more prevalent. We have calls from many people who have been approached by cold callers offering pensions reviews. If you receive one of these calls, check with us so we can explain the warning signs so that you can identify the illegal or inappropriate activities. We have information on our website or you can contact our helpline to help people spot the scams."
Aside from specific pension scams, retirees are also being targeted by criminals who are after their personal details - to use either to access money in their accounts or to take out loans in their name. They can use any number of different excuses to ask for these details: claiming to be from your bank, the taxman, the police, PayPal, or any well-known company.
The advice is always to be wary of these approaches - even if you are expecting an email. You should use separate contact details for the organisation, and get in touch with them to check whether this is an honest approach or a scam.
If you are responding to an email, don't trust the address or phone number in the email itself - look up an alternative. If you are dealing with telephone call, it's essential to either call back on another line, or wait at least ten minutes to ensure the scammer has cleared the line.
In the coming months, the experts are warning that it's vital to be even more vigilant than ever, as scammers will use confusion surrounding the changing pension rules to target yet more victims - and the freedoms themselves will mean even more of their life savings are at risk.
Dominic Grinstead, Managing Director of MetLife UK, explains: "Pension flexibility offers the UK the chance to create a world-leading retirement saving system and to ensure that people have more comfortable retirements. Unfortunately it is also providing opportunities for fraudsters who already see retired people as potential targets as shown by the fact that so many have been subjected to scams."
The areas where pensioners are most likely to be targeted
South West 14%
East Midlands 10%
South East 10%
West Midlands 9%
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