On the 6th of April this year, pensioners will have total control over their personal and company pension savings.
Also, they won’t need to purchase an annuity (income that will last the rest of your life).
So with the possibility of so many people having a lot of cash at their disposal, it offers tempting prey for criminals.
Scamming has already started
According to the insurer Phoenix Group, fraudsters have targeted up to one half of all people on a pension.
Phoenix Group also highlighted the troubling fact that one in four people were tempted to take up the fraudsters’ offers and one in six actually got in contact with them.
The Phoenix Group’s intelligence and investigations manager, Parminder Dhothar, said:
“The increase in aggressive targeting by scammers is very concerning. People can lose their life savings to these con men.”
The con men tend to bombard over 55s with emails, text messages and phone calls, typically offering something along the lines of a “free pension review” – making them seem like an independent and honest advisor.
Phoenix Group and Standard Life combined have blocked a total of £36.3 million in potential pension fraud.
Standard Life’s head of pensions, Jamie Jenkins, fears that a lot of over 55s will transfer their savings into “fraudulent, too-good-to-be-true investments”.
The head of pensions research at IFAs Hargreaves Lansdown, Tom McPhail, suggests that over 55s should resist the temptation of answering phone calls, texts or emails to anyone who offers “free Government guidance” or a “free pension review” and any offers that include “guaranteed” investments.
He also suggests that you should check the company the person represents with the Financial Conduct Authority.