Pension and retirement expert, Jackie Spencer, of the Money Advice Service, has come up with the best advice for pensioners who are looking at investing their pension pots, following looser rules in The Budget:
Be aware of cold callers
Scammers will often cold call you or contact you out of the blue about pensions. They may also run advertisements claiming to offer ‘free pension reviews’. If they are pushy or claim that they can help access individual’s pensions before 55 be wary. Their aim will be to persuade respondents to cash in their pension pot and hand over the money to them to invest.
Be aware of the warning signs
Other warning signs include companies offering a ‘loan’, ‘saving advance’ or ‘cashback from a pension or references to ‘loopholes, overseas investments, creative or new investment techniques. Here are some particular scams to watch out for:
• They try to persuade individuals to take your entire pension as cash – or a large lump sum – and let them invest it on their behalf.
• They promise extra tax savings and/or very high returns from overseas investments or new or ‘creative’ investments
• They claim to know of loopholes that will allow individuals to get more than the usual 25 per cent of tax-free cash
• They say they can help individuals unlock pensions before age 55
• They encourage individuals to transfer their pension quickly, and even send documents by courier
Double check credentials
There are a number of places individuals can go to check whether an organisation is who they say they are. Always make sure the adviser is offering regulated advice.
Don’t rush into making a decision
It is important to take time to carefully consider opportunities before making a decision. Before agreeing to anything or sign on the dotted line, call the Pensions Advisory Service on 0300 123 1047 for more information.
Alert Action on Fraud to potential scams
If someone has made an investment and is concerned that it may have been a scam, raise the alarm by calling Action on Fraud on 0300 123 2040 immediately. Remember if an investment opportunity seems too good to be true, it probably is! The Money Advice Service has plenty of information available to provide guidance about pensions and retirement. Just visit www.moneyadviceservice.org.uk .
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