Woman reviews her pension in her kitchen

Stoke-on-Trent independent financial adviser, Becky Hammonds of Willow Financial Solutions, warns savers hit by the cost of living crisis to beware of free pension audits.

As an unprecedented cost of living crisis grips the nation, a growing number of pension savers are looking to take cash sums from their pension and unscrupulous pension scammers are quick to spot an opportunity to capitalise on their misery.

The Financial Conduct Authority (FCA) is warning pension savers to be wary of approaches from scammers which may appear legitimate offering a free pension review.

This follows data which illustrates that almost 20 percent more pension holders accessed their pots for lump sum withdrawals for the first time between 2021 and 2022 – the number rose 18 percent to 705,666 compared with 596,080 the previous year.

Recent research undertaken by the regulator as part of its latest ScamSmart campaign, highlighted that a quarter of consumers would consider withdrawing money from their pension earlier than planned to cover increases in the cost of living.

The scammers’ aim is to misdirect pension savings away from the pension holder.

So, how do you know if you are being scammed?

Remember that many scammers are sophisticated and appear professional in their approach with fake websites and fake testimonials. They will also use any lack of knowledge on the consumer’s part to their advantage.

What can you do to avoid the scam?

Check the information on the FCA’s ScamSmart website before making any decisions about pensions, including the warning list which identifies firms actively running scams.

It is also possible to check on the identity of an IFA by contacting the FCA which holds a register of all qualified advisers.

A newly established Pension Schemes Bill will also help.  Designed to make pensions safer, better and greener, the new Act is a historic landmark achievement for the rights of savers.

Through this, Trustees are able to “red flag” a transfer request to stop hard-earned savings being moved to suspect schemes without expert guidance.

As the cost of living crisis continues, it is possible you may need to access your cash lump sum. If you do, make sure you contact a legitimate, qualified independent financial adviser.

For pensions and investment advice contact Becky Hammonds on 07969 269677 or email becky@willowfs.co.uk.