Pension scam signs being missed by consumers, report reveals
04 Apr 2016
Many consumers are missing common pension scam warning signs, a new report by Citizens Advice has revealed.
The study found that 88% of individuals are unable to recognise scam warning signs, despite claiming that they would be able to spot a potential hoax.
Pension scams often include unusually high investment returns, criminals offering ‘free’ financial advice and cold calling.
The report highlights a discrepancy between consumer confidence in identifying scams and individuals’ true abilities to recognise them.
76% of those surveyed stated that they feel confident that they could detect a scam. However, only 12% were actually able to identify a scam when presented with one.
It has been suggested that criminals are changing their strategies, moving away from using pension liberation schemes, which offer high rewards, to offering free pension advice in the hope of tricking savers out of their pension funds.
Gillian Guy, Citizens Advice chief executive, said: ‘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.’
Meanwhile, a separate survey carried out by the Observer and insurance company LV has revealed that one in five savers approaching retirement within the next five years plans to take paid-for financial advice. This data was collected through surveying 1,500 people aged over 50.
The analysis also divulged that four in 10 savers do not plan to make use of any form of pension advice, whether it is paid for or free.
Other individuals stated that they would seek advice from friends or family, their pension provider or the Government’s free Pension Wise service.