One in seven non-retired people aged 50 or above were targeted by scammers in the first quarter of 2018, according to new research.
A study of more than 1,000 people found that 14% of participants had been approached by phone, text or email at some point in the first three months of the year, with those contacting them offering free pension advice or investment opportunities.
While some people simply put the phone down or ignore these unsolicited messages, our own experience suggests that countless people nearing retirement accept the promise of ‘free’ financial advice, mistakenly thinking it’s a sensible choice in order to make the most of their savings.
Free advice may seem like a generous deal to some, but quite often this so-called ‘free’ advice will come at a cost. In some cases, people are encouraged to invest their savings in poorly managed schemes or outright scams.
Some advisors will recommend that their clients transfer their money into a particular scheme in order to reap commission themselves, while failing to inform them of more beneficial products available elsewhere.
In recent years we’ve seen thousands of people lose their hard-earned savings to scammers and more often than not, the scam begins with unsolicited contact over the phone or internet.
While pension mis-selling and outright pension scams are certainly nothing new, it’s become easier for scammers and bad financial advisors to target people’s entire pension savings as a result of pension freedom changes.
Concerns were first raised in 2015, with some MPs warning that giving those aged 55 and over full access to their pension savings could leave them more susceptible to scammers.
The government plans to place a ban on cold calling in a bid to curb the problem, but many experts warn that scammers will simply come up with more sophisticated ways of targeting vulnerable people.
For example, last month MoneySavingExpert’s Martin Lewis took Facebook to court after his name and photo was used by fraudsters to scam hundreds of people out of their savings.