Four months after the pension reforms came into effect, new figures reveal that two in five Citizens Advice pensions staff have seen people repeatedly targeted by pension scammers trying to get their hands on cash lump sums.
New data published by Citizens Advice today (7 August) showed that a further one in ten of their staff saw people who had either responded or fallen prey to a scam.
Citizens Advice, which supplies the face-to-face element of the government’s guidance service Pension Wise, said that half of the 460 workers surveyed believe scammers are targeting the cash lump sums people can release from their pension pots.
A further third of staff from across the service think that scams targeting the over 55s have increased.
There are three particular scams that Citizens Advice workers have seen. The first is people being asked by fraudsters to give access to their pension pots, who would then invest into financial products on their behalf. Despite offering high rates of returns, the scammers are unable to state what the investments will be.
The second scam, which is probably the most well-known, is where people are offered free pension reviews. There have been numerous cases crossing the Pensions Ombudsman’s desk which involve liberation and pension reviews.
Citizens Advice said people are texted or cold-called with offers of a review. The caller then asks to visit the person in their own home, bringing paperwork that would allow them to get access to their pension details. One man responded to an internet ad for a free pension review, filled in his details, and was visited by someone claiming to be an IFA, who could not describe any investments.
Lastly, people are also approached with offers to invest their pension cash into products such as property overseas or fine wines.
One investment scam featured two salesmen - one who visited the potential customer to get access to his pension details and a second to encourage him to invest his pension and any other savings into property in South Africa.
Gillian Guy, chief executive of Citizens Advice, said that these scams are particularly dangerous, as they can destroy people’s entire pension savings, leaving them with little or no income for retirement.
“We will be monitoring pension scams closely in order to track how they are evolving and warn consumers what to look out for. If you’ve had an offer or signed up to a scheme you’re unsure about, contact Citizens Advice for support.”
Earlier this month, pensions minister Ros Altmann urged savers to be aware of scams and told people who came across them to report the firms to Action Fraud or The Pensions Advisory Service.
Harriett Baldwin, economic secretary to the Treasury, added that the government is working tirelessly to shut down illegal scams and bring scammers to justice.
“We’ve already made it illegal to imitate Pension Wise, are running scams awareness campaigns and have set up The Financial Conduct Authority which has the power to prosecute scammers.
“If you are in any doubt about how to spot a scammer or want to talk through your retirement options, I urge you to visit the Pension Wise website or book a free telephone or face to face guidance session.”
donia.o’loughlin@ft.com
