Andrew Tully, Technical director at Canada Life comments on the Work & Pensions Select Committee inquiry into pension scams: “Falling prey to a scam can be devastating, not only for the individual involved but also for their family and friends. Sadly, the Covid-19 pandemic has provided a fertile opportunity for ‘lowlifes’ to prey on not only the vulnerable but also people who are worried and anxious about both their health and their wealth. Today’s inquiry into scams is urgently needed as our research shows that one in 10 UK adults have either been a victim or know someone who has fallen victim to a scam since the outbreak of Covid-19. That is 5.2 million people. With victims losing around £566 on average per scam.
“With families trying to make ends meet as the economy dips, an offer of money or easy access to your pension early might seem the perfect opportunity to dig yourself out of trouble - at face value. Sadly it’s highly likely it will be scammers, so be 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.”
Clare Moffat, head of the intermediary development and technical team at Royal London, said: “Pension scammers have taken advantage of the flexibilities included in Pension Freedom and Choice to separate people from their hard earned pension investments and undermine their long held retirement plans. These fraudsters are a scourge and we welcome the Work and Pensions Select Committee’s decision to look at how people can be better protected.”
Simon Harrington Senior Public Policy Adviser at PIMFA said: “Pensions scams have become a significant problem in recent years but in the wake of the COVID-19 pandemic PIMFA has become particularly concerned about the increase in scams aimed at people that might be approaching retirement and have seen significant losses in their pension fund in recent months.
“Another target of pension scammers have been those people approaching the age of 55 - though we have also seen evidence of people as young as 35 being encouraged to unlock the cash in their pension at the urgings of unscrupulous individuals.
“All too often consumers are encouraged to take money out of their pensions to invest elsewhere. They are told what they are investing in is low risk, while offering high returns. Moreover, such products are not always marketed to sophisticated or high-net-worth investors. In fact, according to the FCA targets often include retiring police officers, nurses and those that have recently left the Armed Forces, while the average loss victims suffer is now as high as £82,000.”
“PIMFA is extremely concerned about pension scams and feels that the public needs to have more information at their fingertips about the dangers posed by what are often very sophisticated scams. We look forward to contributing to the investigation of the Work and Pensions Select Committee with our recommendations of how to tackle this issue, and continuing our work with our existing partners”
Margaret Snowdon, Chair of PSIG welcomes the WPC inquiry into the impact of pension freedoms on saving for retirement: “I am delighted that at long last, parliament will focus on pension scams, their impact and importantly, how the industry can help protect against devastating loss. Since 2015, PSIG has promoted the necessary due diligence to spot scams and how to respond to the threat, via its Code of Good Practice, now in its third iteration. It also shares intelligence on scams with the authorities. We have fought very hard for a change in the law to help trustees defend against scams and for a change to tax law to prevent the awful tax penalties levied on innocent scams victims. Our work has prevented thousands of scams and we are working on how to do more. We look forward to helping the Committee in its inquiry.”
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