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Consumers prove themselves ill-equipped to deal with pension scams

Sixty-four per cent of savers would consider a pension product from an unsolicited caller

31 March 2016

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Only 12 per cent of pension scheme holders are able to successfully differentiate between fraudulent and genuine pension investment products.

Meanwhile three in four people (76 per cent) feel confident in their ability to identify these scams, a report from Citizens Advice has revealed.

In light of the pension freedoms, scammers have stopped trying to offer liberation schemes as bait and have turned to offering free pensions advice and reviews as a stepping stone towards defrauding savers of their pension savings.

Gillian Guy, chief executive of Citizens Advice, commented: 'Fraudsters have shifted their tactics to rob people of a retirement income.

'It's difficult for consumers to stay ahead of pension scams as they evolve. Many scammers use professional looking websites and leaflets to fool their victims into signing up to free pensions advice or cold call with offers of unusually high investment returns.'

The report highlights that people are most vulnerable to scams being offered though phone calls, letters and emails from individuals without any prior contact.

In the first year since the freedoms came into effect, over 10.9 million consumers have received contact about their pension which they did not initiate.

This is exacerbated by 64 per cent of respondents saying that they would consider an offer about their pension from an unsolicited caller.

Of these, less than half (45 per cent) said they would check the company's website to verify their legitimacy.

'Before considering any kind of pension offer, you should check the Financial Conduct Authority's website to make sure the company is legitimate,' Guy added.

The report shows that only 33 per cent of the 2000 people surveyed would actually check the Financial Conduct Authority's website to ensure they have been approached by a legitimate company.

 

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Pensions