• Warning: Self-employed are vulnerable to pension fraud

    By James McLarin
    Business and Finance Correspondent

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    Freelancers could be vulnerable to “devastating” pension scams, the Association of Independent Professionals and the Self-Employed (IPSE) has warned.

    The warning comes following the release of figures from the Financial Conduct Authority (FCA) and The Pensions Regulator (TPR) which reveal that victims of pension fraud lost an average of £82,000 in 2018.

    According to these figures, 60 per cent of people who try to boost their savings are vulnerable to fraud. This risk drops to 42 per cent for people who are not.

    Cold calls, exotic investments and early access to cash were listed as the most persuasive tactics used by fraudsters. The research also found that those who consider themselves smart or financially savvy are just as likely to be persuaded by these tactics as anyone else.

    Self-employed may be looking for a quick-fix

    Research by IPSE found that two-thirds of freelancers are worried about their savings for later life, but only a third are actively saving.

    Jonathan Lima-Matthews, public affairs manager at IPSE, said this gap is worrying for those self-employed people who may look for a quick-fix pension scheme.

    He added: “The impact of a pensions scam can be devastating, so these are worrying figures. The self-employed are poorly served with pension products so struggle to save throughout their careers. They may then try to quickly boost their pension, which increases the risk of becoming vulnerable to fraud.”

    Pension fraud should be taken seriously, as victims of pension fraud are often left with limited income for their retirement.

    Here are four simple steps from the FCA and TPR to protect yourself from pension scams:

    1. Reject unexpected pension offers whether made online, on social media, or over the phone
    2. Know who you are dealing with before changing your pension arrangements – check the FCA Register or call the FCA contact centre on 0800 111 6768 to see if they are authorised by the FCA
    3. Don’t be rushed or pressured into making any decision about your pension
    4. Consider getting impartial information and advice

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