Andrew Tully, technical director at Canada Life welcomes greater industry cooperation to tackle pension fraud:
“Pension fraud is an urgent and potentially devastating crime for its victims and the problem is not going to go away on its own, so I welcome the Work and Pensions Select Committee’s continued interest to co-operate with the industry and tackle the problem.
“Covid-19 has presented a clear opportunity for fraudsters to prey on the growing financial fears of their victims. A Canada Life survey found that 5.2 million UK adults (11%) had either fallen victim or knew someone who had fallen for a scam since March with one in four of these (28%) relating specifically to pension fraud*.
“During the session The Pensions Regulator also revealed that at least £54m of lost pension savings were under investigation, involving over 18,000 savers. However this is likely only to be a fraction of the scale of the problem as many cases will go undetected for years or the victims may feel shame or embarrassment in coming forward.
“While falling prey to scams hits victims financially, there are also quite severe hidden costs to mental health as people’s ability to trust is shattered overnight. Despite the public message campaigns and the ban on cold-calling, the scammers are either simply ignoring the law or looking to sophisticated campaigns over social media in order to con people out of their savings. The rapid rise of romance scams and using the Track and Trace service only serves to show we all need to be vigilant, scam aware and follow the simple rule of thumb - if it appears too good to be true, it inevitably is. Simply walk away, hang up, or delete the email or text.”
Tips to help avoid financial scams
- If you receive an offer to help you access your pension savings before age 55. It is only possible to do this in rare situations, for example if you are very ill, so always check with your pension provider before making any decisions.
- Warnings that the deal is limited and you must act now. This is a pressure tactic, and making any financial decisions should not be done under pressure.
- HMRC will never contact you by email, phone or text informing you of a tax refund, so simply delete or ignore any contact made this way – HMRC will only contact you via post.
- You are discouraged from seeking professional financial advice or talking to Pension Wise or The Pensions Advisory Service (TPAS). An adviser would be able to explain the rules and tax implications of different options and help you make the best choices for your personal circumstances, so be very suspicious if this is discouraged.
- A recommendation to take a large amount of money, or your whole pension pot, in a lump sum and invest it elsewhere. Seek professional financial advice, and be very wary of unsolicited offers of ‘amazing investment returns’