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How to avoid signing away your pension to scammers

6th April 2015 Print

The new pension freedoms give people far greater choice about how they access their pension savings, from age 55. But unfortunately, they also open the doors to pension scammers making the over 55s a soft target. Aegon provides tips to help people spot potential scammers, which could lead to them losing their hard-earned pension.   

Kate Smith, Regulatory Strategy Manager at Aegon said: “The new rules mean that people will have more choice in how they take their pension. Unfortunately, they also mean new opportunities for fraudsters and people need to be alert to the risk this presents. In the next few weeks we expect to see scammers turn their hand to enticing pension money out of the over 55s through non-regulated investments apparently promising fantastic returns.

“The pension changes provide a profitable playground for pension scammers to target over 55s as they start to consider how to make the most of the flexibilities available. Helping customers protect themselves will be an important challenge for the industry and regulators.

“Pension scams are not new. But with the new flexibilities, fraudsters don’t need to set up complicated schemes pretending to be within pension tax law. As a provider we continue to be vigilant and do what we can to protect our customers from being potential victims to any of these fraudsters. But ultimately when the money has been removed from a regulated provider there is little we can do.

“The best way to avoid becoming a victim of a pension scam is to be on your guard. If an investment opportunity seems too good to be true, it probably is.

Aegon has the following tips to help people avoid falling victim to a pension scam:

Never act immediately following a cold call

Never sign any paperwork unless you fully understand what you’re getting into

Never feel pressurised into making a quick decision

Always do the research

Always, if in doubt, use a regulated independent adviser. You can find one of these using the ‘unbiased adviser’ website.