Pension study finds almost 90% miss warning signs

A study from Citizens Advice showed Britons mock adverts and asked which one they would be most likely to pick if they were seeking help with their pension.

Some 88% opted for scams promising free advice, early access to that person’s pension or high investment returns of 10% or 15% or claiming to be “approved by government pensions department”.

Just 12% opted for an ad intended to show a legitimate pension offer, which promised returns of 5% and said the firm was authorised by the Financial Conduct Authority (FCA).

New pension freedoms were introduced nearly a year ago to give people aged 55 and over more choice over what they do with their retirement pot.

But concerns have also been raised that the freedoms give fraudsters extra opportunities to scam people out of their cash.

Despite the findings from Citizens Advice, the research among more than 2,000 people also found many feel confident they could spot a fraudster.

Three-quarters (76%) said they were confident they could identify a pension scam - even though just 12% were actually able to do so when a scam was presented to them.

The report also reveals people are particularly at risk of scams from phone calls, post and emails which come out of the blue.

Citizens Advice estimates that up to 10.9 million consumers received unsolicited contact about their pension in the last year.

Nearly two-thirds of consumers (64%) say they would consider an unsolicited offer about their pension and many would only consult informal sources about whether the approach is genuine, such as asking family members what they think.

When asked how they would check whether a pension offer was legitimate, only one third (33%) of people said they would make sure the company is listed on the FCA’s online register, which can be used to check whether a company is authorised to give regulated advice.