It\u2019s been six years since Pension Freedoms were introduced. They gave retirees more choice in how they accessed their pension, and increased the need to make important decisions about how and when to do so. Unfortunately, it\u2019s also made pensions an attractive target for fraudsters.<\/p>\n
In recent weeks, the lack of Pension Freedom safeguards, causing some retirees to fall victim to scams, has made headlines. Speaking to <\/i>FT Adviser<\/i><\/a>, Stephen Timms, chairman of the Work and Pension Committee, said the lack of safeguards has been \u201clife-ruining\u201d for some.\u00a0<\/span><\/p>\n According to the Financial Conduct Authority<\/a>, over \u00a330 million was lost to pension scammers between 2017 and 2020. The amount that individuals lost varied, but one victim lost \u00a3500,000. In many cases, the money lost is irrecoverable, so getting hit by a scam could have a devastating impact on your retirement plans and quality of life. It\u2019s thought that the number of reported scams is only the tip of the iceberg.\u00a0<\/span><\/p>\n As one of the largest assets many people have, it\u2019s easy to see why scammers are targeting pensions. The lack of awareness around how pensions work and the ways they can be accessed are also valuable for scammers, as they can capitalise on people\u2019s ignorance. Understanding how you can access your pension can help you reduce the risk of falling victim to a scam.\u00a0<\/span><\/p>\n The importance of keeping track of your pensions<\/b><\/p>\n While it might be years before you can access your pension, it\u2019s important to keep track of it. It can help you better understand your retirement provisions and means you\u2019ll be better informed if you are targeted by scammers. Despite the importance of pension for long-term security, it\u2019s something many are overlooking.<\/p>\n According to Unbiased<\/a> research, one in five Brits don\u2019t know how much they have saved in their pension. Not understanding your pension and it\u2019s worth can provide scammers with an opportunity to exploit you. It can also mean you aren\u2019t as cautious when making decisions or discussing your pension as you would be with other assets.<\/p>\n It\u2019s also important to note when you can access your pension. Many scammers will claim they can \u201cunlock\u201d your pension early using loopholes. However, your pension is not accessible until you\u2019re 55, rising to 57 in 2028. Being able to access your savings early may seem like a tempting offer, but it\u2019s a red flag that you should keep in mind.\u00a0<\/span><\/p>\n There are rare circumstances when you may be able to access your pension early, such as following a terminal diagnosis. In these cases, however, you should speak directly to your pension provider.\u00a0<\/span><\/p>\n How can you access your pension?<\/b><\/p>\n As well as knowing when you can access your pension, understanding the different options can mean you\u2019re able to spot a scam.\u00a0<\/span><\/p>\n You don\u2019t just have to pick one option \u2013 you can mix the different options to create a pension income that suits you.<\/p>\n Remember, you don\u2019t have to access your pension once you reach pension age. You can choose to leave it where it is until you\u2019re ready to take an income from it. Your pension will usually remain invested.<\/p>\n 5 pension scam warning signs<\/b><\/p>\n If you\u2019ve been approached about a pension or investment opportunity that you\u2019re not sure about, please get in touch. We\u2019ll help you understand what is on offer \u2013 another pair of eyes can make all the difference if you\u2019re being targeted by a scammer.\u00a0<\/span><\/p>\n\n
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