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29% of people unable to spot simple pensions scam

5 March 2018

Four in five savers want stricter rules and checks to ensure pension pots are secure, according to new research by the Pensions and Lifetime Savings Association. 

In a survey of 2,000 adults, only 28% of people felt checks were unnecessary because people should be able to easily access their money as and when they want.

The research comes amid growing awareness of pension scams, with the Government introducing a ban on cold calling in relation to pensions.

The research by PLSA revealed that one in six (17%) of those with a pension have been contacted by a company other than the one that provides their pension to discuss making changes or transferring a pension. One in 10 (11%) have been contacted multiple times.

To test people’s understanding of the topic, the PLSA provided respondents with a selection of scenarios that might be pension scams. Almost 3 in 10 (29%) missed the most obvious pension scams.

The majority (65%) were able to recognise a situation “when they were contacted by someone who is trying to get you to transfer your pension to an investment or scheme which seems too good to be true” as a scam, but were less sure about other scenarios.

The findings showed that most scams appeared like they could be legitimate, so some respondents were wary about situations which might be completely authentic. Up to 36% felt that if they received advice on how to invest their pension and subsequently lost money it could be a scam.  A further 27% thought if they were contacted by someone to discuss their pension it was a scam.

Call for Govt to do more

The PLSA is calling for an authorisation regime for pension schemes receiving transfers to stop fraud being committed.

James Walsh, policy lead for Engagement, EU and Regulation at the PLSA, said: “[This] research shows that consumers struggle to identify pension’s scams and are keen to see stronger checks. As an industry, we need to step up to this challenge and the Government’s recent commitment to tabling an amendment to the Financial Guidance and Claims Bill to introduce a ban on pension cold-calling is a step in the right direction. However, pension scams come in all shapes and sizes as scammers become increasingly sophisticated. Whilst the Government’s ban on cold calling is welcome it is only part of the solution.

“There are other steps the Government can also take to help protect people’s hard-earned savings. The PLSA is calling on the Government to make urgent progress towards introducing an authorisation regime for pension schemes. That will reassure people that they are only dealing with legitimate providers.”

 

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