19 February 2018

Almost 80% in favour of stronger checks to avoid pension scams: PLSA calls for authorisation regime to help stop scammers in their tracks

New research from the Pensions and Lifetime Savings Association (PLSA) highlights the difficulty people have in spotting pension scams and backs stronger checks to help people avoid them. This research builds on the PLSA’s call for an authorisation regime for pension schemes receiving transfers to help stop fraudsters in their tracks.

Pension scams are an emotive issue and only 8% did not have a view on one of more of the statements about checks. Of those pension savers who did, the majority (88%) agreed the checks that pension providers and workplace pension schemes undertake to help protect against scams were good, as long as they make it harder to scam people.

Four fifths (79%) agreed there should be stricter rules and checks to ensure that pension pots are secured. Only 28% felt these checks are unnecessary because people should be able to access their money easily as and when they want.

To test people’s understanding of this important topic, the PLSA provided more than 2,000 people with a selection of scenarios that might be pension scams. The research found that a worrying proportion (29% equating to 14.8m UK adults) missed the most obvious pension scams.

Indeed, the majority (65%) were able to identify a situation “when they were contacted by someone who is trying to get you to transfer your pension to an investment or scheme which seems too good to be true” as a scam but were less sure about other scenarios.

Less than half (48%) of respondents thought that “when you speak to an adviser who tells you to take actions which you find out are not in your best interest” could be a pension scam and only 43% thought “when you are advised to invest your pension fund into an investment that means you end up paying a huge tax bill” described a pension scam.

Most scams seem like they could be legitimate so some respondents were wary about situations which might be completely authentic. Indeed, 36% felt that if “they received advice on how to invest their pension and subsequently lost money” it could be a scam and 27% thought that if “they were contacted by someone to discuss their pension and provided with advice” described a scam.

These findings are concerning given that one in six (17%) of those with a pension say they have been contacted by a company, other than the one that provides their pension, to discuss making changes or transferring their pension. One in ten (11%) have even been contacted multiple times.

Press release

© PLSA - Pensions and Lifetime Savings Association