With the pensions freedom changes now in place and individuals having more freedom on how they spend their retirement pots, people are urged to seek professional advice more than ever. Especially with the significant alterations we have seen in taxation, which could see people left with hefty tax bills if pension withdrawals are not broached correctly.
Since the legislation changes were announced, the media has been inundated with warnings on the scams that were likely to follow; and how these scammers would use these complex changes to their advantage as scare tactic ammunition. Many will also use promises of one-off investments, upfront cash or pension loans used to lure pensioners into parting with their hard earned cash, The Pensions Regulator warns. Most of these, however, will be fake.
Unfortunately the warnings are not needless either, as in February, the number of pension related spam calls and texts reported to the watchdog rose by a startling 66%.*
But how do scammers get your details…
The ICO (Information Commissioners Office) is currently undergoing an investigation into allegations that companies have been found to be selling pensioners' details to fraudsters and cold-calling firms, without consent, for as little as 5p. These personal details reportedly include salaries and the value of their pensions and investments.*
In times like these it is crucial that you only deal with reputable companies - especially when it comes to your financial affairs. We would like to assure all of our clients that we would never distribute any personal details to a third party. We would also never make cold calls.
“You can spend years saving into a pension only to find yourself tricked out of your money in the blink of an eye by these unscrupulous crooks, who are now clustering around older savers. If you are cold called by someone offering you a free pensions review, it’s probably a scam so put the phone down”, says Pensions Minister Steve Webb.
Always check the credentials...
Most of the companies making these offers are not authorised by The Financial Conduct Authority (FCA), yet often falsely claim they are acting on their behalf. The FCA warn that some callers may claim to represent the Government’s free and impartial guidance service Pension Wise, however, would like to caution people that this service would never cold call you.
You should always check that anyone offering advice or other financial services are authorised by The FCA and that they appear on the FCA Register. If you use a firm or individual who is not authorised, it means that you may have no right to complain to the Financial Ombudsman Service or to claim compensation from the Financial Services Compensation Scheme if things go wrong.
Click here to read more from the FCA on how to be a Scamsmart investor.
Keep your details safe and remember, if it sounds too good to be true, it probably is!
* Source: dailymail.co.uk 17.03.15 & 30.03.15