Protecting your savings: Pull up the drawbridge and drop the portcullis!

We are hearing a lot through the media about the attacks we may experience under the new UK Pension Reform arrangements and regulations, when we gain access to our pension pots and can choose to do what we like with them. What an opportunity for fraudsters who right now are ready to assault our new wealth castles!

We will have all seen stories in the press referring to pension scams. Imagine you were visited by one of these fraudsters and that you had a £30,000 pension pot. If the fraudster was able to convince you to move your pension pot into their very reputable-looking investment scheme then, after three hours, you would have lost that £30,000 and the fraudster’s rate of pay would suddenly have become somewhere around £10,000 per hour!

There are two simple reasons why our pension pots are at risk and why we can be robbed so easily:

  • Firstly, we are all tempted by promises of ‘market-beating returns’. The old adage though, remains: if it sounds too good to be true, then it probably is. Watch out in particular for promises that do not discuss at length your individual plans and circumstances. This is, at best, product selling and at worst, a potential scam, rather than proper financial planning.
  • Secondly, the fraudsters are clever, well prepared, rehearsed and professional. Parting people from their cash is their job and they are well-armed and equipped to do so, with impressive documentation and well-rehearsed manners and scripts. Always research them thoroughly, checking their FCA registration independently.

The pension freedoms present a great opportunity to many of us, but don’t forget that they also offer the same for the fraudsters. Time to man your defences and engage in some proper retirement planning!