With so many questions about what savings choices are available to retirees, vulnerable savers could fall for scams - here's how to avoid being preyed upon...
The Pensions Advisory Service (TPAS) has recently launched a new campaign warning people about the threat of pension scams. In light of this, WEALTH at work, a leading provider of financial education in the workplace, supported by guidance and advice, shares their top tips on how employees could avoid losing their pension to scams and fraudsters.
1. Scams don't look like scams – Scams look and sound legitimate by having very professional looking websites and literature which is why employees can easily be deceived. Whichever option employees take for their pension income, they must check before committing to anything that the company is registered with the Financial Conduct Authority (FCA).
2. If it’s too good to be true, it probably is – If an investment offers the opportunity of a lifetime, it’s likely to be a scam and there is little that can be done for employees who fall for it.
3. Scammers will do their homework - Legitimate investment companies are very unlikely to cold call. Those who run pension scams are clever and may have been able to get hold of some of your employees’ personal details; not just about them, but their local area and interests. Employees need to be aware so as to not let scammers’ knowledge and friendliness take them off guard and allow them to be conned.
4. The right decision takes time - Genuine advisers will never rush clients to make a decision. Anything that is advertised as a limited time offer is likely to be a scam. Always check with the FCA.
5. Know the basic facts first - Pensions can normally only be accessed at the age of 55, with the exception of seriously ill health. In normal circumstances, if a company promises to release pensions early they are lying, and it is a scam. Employees must know the facts to avoid fraudsters.
6. Check it out – Employees must know where they can go if they are unsure about anything they have been offered; their employer if it relates to their workplace pension, or The Pensions Advisory Service (TPAS) or Pension Wise for any other kind of pension.
7. Help stop the scams - If an employee thinks they have been or are being scammed, they should contact TPAS immediately. Not only may they be able to help the employee involved, but they will be able to help others from falling for the same scam.
Jonathan Watts-Lay, Director, WEALTH at work, comments, “The crucial thing to remember is that scams don’t look like scams. In our financial education seminars we show adverts from organisations that are ‘too good to be true’ to prove how hard they can be to spot. The rule is, whatever investment employees are planning to make, they should check out the company with the FCA first. If the FCA hasn’t heard of them, employees will have no place to go if they turn out to be fraudsters.”
He continues, “Employees need to understand that taking regulated advice and getting the additional consumer protection it offers should not be underestimated”.
For more details, visit the FCA’s ScamSmart website which includes a warning list of companies operating without authorisation or running scams www.scamsmart.fca.org.uk
WEALTH at work is blogging about the key areas of employer consideration when helping their employees through retirement in Reward's financial education hub.
The hub examines all the changes in pensions and looking at how you can help your employees with financial education across all their savings. CLICK HERE to access the hub
For further information about WEALTH at work, please CLICK HERE