PLSA: Majority of adults want scam protection

PLSA: Majority of adults want scam protection

New research from the Pensions and Lifetime Savings Association (PLSA) has found that approximately 80% of adults think there should be stricter rules and checks to protect against scams.

The PLSA survey, based on an omnibus poll of 2,004 nationally representative UK adults aged 18 or over, revealed that 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.

The PLSA also tested respondents’ understanding of pension scams, finding that a worrying proportion (29%, equating to 14.8 million UK adults) missed the most obvious.

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.

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 that 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, while 27% thought that if “they were contacted by someone to discuss their pension and provided with advice” described a scam.

These findings are concerning, according to the PLSA, 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 it. One in 10 (11%) have even been contacted multiple times.

James Walsh, policy lead for engagement, the EU and regulation at the PLSA, commented: “Today’s research shows that consumers struggle to identify pension scams and are keen to see stronger checks.”

“As an industry, we need to step up to this challenge and the Government’s recent commitment to tabling an amendment to the Financial Guidance and Claims Bill to introduce a ban on pension cold-calling is a step in the right direction.”

Responding to the PLSA’s survey, Darren Philp, director of policy at The People’s Pension, a workplace pension scheme, said: “Sadly, this is a problem that won’t just go away. Stronger safeguards to help protect people from scammers are crucial, and the suggestion of an authorised list for pension transfers would be a major step forward in stopping the scammers in their tracks.”

“Pensions are complicated and basic human nature means that too often we can be tempted by the offer that is too good to be true. Directing people to help from TPAS and PensionWise will help protect them, and the cold calling ban is a must, but it won’t be enough to stop the worst scams.”

“The government and regulators must continue the good work they are already doing to help protect people’s financial futures.”

Categories: News, UK Pensions

About Author