Scammers Want Your Pension Cash, Warns Minister

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Financial watchdogs are warning pension savers to watch out for scammers after their cash.

The Pensions Regulator (TPR) is issuing the alert ahead of new government freedoms that will let the over 55s take money from their pensions to spend how they wish.

The reforms are set to start from April 6, 2015.

Regulators are concerned that scammers will change take from setting up pension liberation firms seeking to defraud savers out of their cash and turn to offering duff investment advice for a high fee instead.

TPR is already working with financial services firms and other government agencies to identify and publicise likely scams.

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But they fear pension reform day will signal a flurry of cold-call texts and phone calls from fraudsters out to part retirement savers from their cash with offers of high-return investments that either do not exist or fail to perform.

Investment fraud

Minister for Pensions Steve Webb said: “These fraudsters can take the cash you have spent a lifetime saving in a blink of the eye with online investment frauds.

“They have even sent me texts asking if I want to access my pension early through one of their scams.

“Regulators, financial firms and the police are working hard to tackle these fraudsters, but people should still be aware that these crooks are out there and not to trust anyone who approaches them out of the blue with offers that seem too good to be true.”

TPR urges anyone wanting financial advice to contact the free government Pension Wise service and to check out callers posing as professional advisers with the Financial Conduct Authority (FCA).

TPR chief executive Lesley Titcomb said: “Scammers will try to use every trick in the book to persuade people to part from their money from flattery to pressure sales techniques.

Free advice

“Savers should bear this in mind and do all they can to protect their money and should not sign contracts or transfer cash before taking professional advice from someone they trust.

“That’s one reason why the government has put the free Pension Wise service in place, so everyone can talk through their financial options with an independent adviser before making any commitment.”

She explained that fraudsters running scams are well-organised, sophisticated and put themselves across as honest and helpful.

“No doubt the nature of the scams will change as we catch up with the bogus advisers and close them down,” said Titcomb. “We expect to see offers of investments overseas in property, carbon credits and land banking.”

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