Around one in four people could be at potential risk of a pension scam, reveals helpandadvice.co.uk, following analysis of the highest ever number of its Pension Scam Assessments (as recommended by Money Helper, provided by the government’s Money & Pensions Service ‘MaPS’) completed between January and March 2023.
The average scam likelihood score was 25%, meaning that of the 1562 people that completed the assessment, a quarter of cases had associated red flags. While a red flag does not guarantee a definite scam, it does mean further investigation is needed. Having tracked the data for over a year, helpandadvice.co.uk has found that the potential likelihood of a scam consistently remains at around 25%.
Almost one in five (17%) of people were told that they could achieve higher investment returns should they transfer, perhaps in response to the market volatility seen in Q4 of 2022. Pushing people to make a quick decision is often a red flag, and 15% of people experienced this. Nearly one in 10 (9%) were told the adviser knew of loopholes to access higher levels of tax-free cash, a substantial increase on the previous quarter where only 2% were told this.
Saq Hussain of helpandadvice.co.uk said: “Pension scammers are opportunistic and often one step ahead, changing their tactics and the way they engage people depending on the current situation. With the Government announcing that the UK is to ban all cold calls selling financial products as part of a crackdown on scams, we sincerely hope that these practices finally come to an end and people are properly protected.
“Our year long analysis gives some insight into some of the fraudulent activity that the Government is trying to stop, and how this is evolving over time, with this past quarter seeing almost a fifth of people lured with the promise of achieving higher investment returns, perhaps in response to the volatility we saw in the latter part of 2022, and the ongoing cost of living crisis.
“This quarter also saw the highest ever number of helpandadvice.co.uk Pension Scam Assessments completed, a sign hopefully that people are becoming more scam aware and realising they need help identifying red flags before they make a decision that could have disastrous consequences.
“We urge everyone considering a pension transfer to head first to our Pension Scam Assessment – its free, simple and easy to use and provides a sense check, raising warning flags based on their answers to a range of questions, with clear signposts about what to do next.”
The Pension Scam Assessment Tool was developed to help anyone considering a pension transfer. It asks 20 straight forward questions relating to the tactics that a pension scammer might use to coerce someone into transferring their pension. No personal details are needed. Once complete, the Pension Scam Predictor displays a likelihood of the pension transfer being a scam, listing the red flags and explanations.
If concerns are identified, it then instructs the individual to:
Stop doing anything further with the transfer;
Contact the adviser to get answers to the questions raised by the red flags identified by the tool;
Contact their pension company, pension administrator, the employer or trustee to which the pension relates, ask to stop any transfer payment and to help determine whether the pension is being transferred to a legitimate pension scheme.
Report to the Financial Conduct Authority (FCA) by contacting their Consumer Helpline on 0800 111 6768 or using the scam reporting form at www.fca.org.uk
Report to Action Fraud on 0300 123 2040 or www.actionfraud.police.uk
