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20 Apr 2016

Keeping scammers away from your pension pot

New research from Citizens Advice, City AM reports, shows that the large majority (88%) of people in the UK are unaware of the most common tricks pulled by pensions fraudsters.

As Gillian Guy - chief executive of Citizens Advice - explains, as pensions scams evolve and technology improves it can be difficult for customers to know who or what to trust. She told the publication, “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.”

With this in mind, here are four ways in which City AM advises you could be putting your retirement savings at risk:

Following up unsolicited advice

According to Citizens Advice, almost 11 million people have received some type of unsolicited contact regarding their pensions since April last year - 2.4 million of whom were aged 55-64. Surprisingly, nearly two-thirds (64%) of consumers would consider acting on this uninvited advice; but most would not conduct thorough checks into the legitimacy of the offer, and only a third (33%) would check the source on the Financial Conduct Authority´s website.

Believing offers that are too good to be true

The advisory group suggests that any person offering a return on investment of over 8%, or suggesting that you transfer your money overseas, should be treated with extreme caution.

Trying to access your pot before you´re 55

The new pension freedoms introduced last April meant that people could start accessing their pensions without having to purchase annuity; but these rules are only applicable to savers aged 55 and above. So if you´re not yet 55 and receive an offer to withdraw a lump sum from your pension savings, you could be dealing with a scammer - not to mention risk being hit with a 55% tax bill as a penalty.

Giving out your details in exchange for free advice

Instead of tempting people with offers of immediate cash returns, many fraudsters are now offering free pensions advice or a free pensions review, in exchange for your details and other information; this is then used as leads for other scams. Citizens Advice´s research found that this type of hoax was mostly being aimed at those aged 45-54.

Copyright M2 Bespoke 2016

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