Almost 80 per cent of pension savers have called for stricter checks to prevent scams, the Pensions and Lifetime Savings Association has found.
According to new research from the PLSA, four fifths, 79 per cent of participants agree that there should be stronger checks to ensure that pensions are protected. A lesser 28 per cent thought these checks are unnecessary because people should be able to access their money when they choose and with ease.
However, the majority, 88 per cent, agreed that the checks pension providers and workplace schemes undertake to help protect against scams are good, “as long as they make it harder to scam people”.
When presented with a selection of scenarios that might be pension scams, the PLSA noted that 29 per cent of the 2,000 surveyed missed the most obvious pension scams. This equates to 14.8 million UK adults.
Nonetheless, 65 per cent were able to spot that a situation where they are contacted by someone who is trying to get them to transfer their pension to an investment or alternative schemes which “seems too good to be true” as a scam.
Less than half, 48 per cent, however thought that that “when you speak to an adviser who tells you to take actions which you find out are not in your best interest” could be a pension scam. A further 43 per cent though the situation where “you are advised to invest your pension fund into an investment that means you end up paying a huge tax bill” described a pension scam.
Moreover, 36 per cent noted that if they lost money following advice on how to invest their pension could be a scam and 27% thought that if “they were contacted by someone to discuss their pension and provided with advice” described a scam.
The PLSA explained that its findings are “concerning” especially as one in six of those with a pension have been contacted by a company, other than the one that provides their pension, to discuss changes or a pension transfer. One in ten have been contacted a number of times.
The research adds to the PLSA’s attempts to introduce an authorisation regime for pension schemes receiving transfers to help stop fraudsters early.
PLSA policy lead for engagement, EU and regulation James Walsh commented: “Today’s 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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