Pension reforms: Drawdown customers warned over scammers

Emma Haslett
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Savers are targeted by email and phone, Citizens Advice said (Source: Getty)

George Osborne's reforms to pensions, which mean people can withdraw their savings and buy, say, a Ferrari (or just shares in Lloyds Banking Group), was seen as a revolutionary move by most savers. But it seems scammers were also pretty pleased about it: now Citizens Advice has warned pensioners and pensioners-to-be to be on alert.

The organisation said this morning that the number of cold calls and emails targeting over-55s with "fraudulent pension opportunities" has jumped in the four months since the new rules were introduced.

Read more: The 10 shares pension drawdown investors are buying

Two in five Citizens Advice pensions staff have seen people "targeted repeatedly" with pension scams, while a third reckon scams targeting over-55s in general have increased.

The most notable scams include "unspecified financial products", in which fraudsters ask savers to allow them to invest their savings on their behalf, offering a high rate of return; free pension review, in which callers ask to visit savers in their own home, thereby being shown paperwork that would given them access to their pensions; and more specific investments such as fine wines or overseas property.

Citizens Advice warned savers to be particularly vigilant about cold calls: four in five of those targeted were contacted by phone, while a third were contacted by email, a third were contacted by post and one in five had been approached by text message.

“Pension and investment scams are particularly dangerous as they can destroy people’s entire pension pot, leaving them with little or no savings for retirement," said Gilliam Guy, chief executive of Citizens Advice.
" We will be monitoring pension scams closely in order to track how they are evolving, and warn consumers what to look out for. If you’ve had an offer or signed up to a scheme you’re unsure about, contact Citizens Advice for support.”

Signs it's a pension scam

Free advice: an offer of help with your pension, such as free review

High rates of return: Any promotion offering you a higher rate of return than other investors

Time pressure: If you are told you must give your details within a short time frame 

Early access: an offer to help you access your pension before the age of 55

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