Monday, 19 February 2018 11:52

Pension scam checks ‘unnecessary’, say 30% of savers

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Nearly 3 in 10 savers think checks aimed at preventing pension scams are ‘unnecessary’, while a similar proportion failed to spot scamming tactics when tested.

Over 2,000 people were surveyed for a report by the Pensions and Lifetime Savings Association published today.

They were asked their views on pension providers and workplace pension schemes carrying out checks before releasing a person’s pension savings to prevent possible scams.

Some 28% agreed with the statement that these checks were, “unnecessary as a person should be able to access their money easily as and when they want to.”

Researchers also found that a “worrying proportion” - 29% - equating to 14.8m UK adults - missed the most obvious pension scams when tested on a range of scenarios.

However, the majority (65%) were able to identify 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.

The PLSA said its findings highlighted the difficulty people have in spotting pension scams.

The body wants an authorisation regime for pension schemes receiving transfers to help stop fraudsters in their tracks.

Despite the 28% who thought checks were unnecessary, the majority (88%) agreed with a statement that the checks were “good, as long as they make it harder to scam people”.

Four fifths (79%) agreed there should be stricter rules and checks to ensure that pension pots are secured.

James Walsh, policy lead for engagement, EU and regulation at the PLSA, said: “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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