How to avoid cold-call pension scams

Since 6 April this year, you've been able to do pretty much whatever you want with your pension pot once you turn 55 take out the lot at once, withdraw a regular income, or take out cash as and when you need it (all subject to paying income tax, of course, after the initial 25% tax-free chunk). There's no need to buy an annuity although you still can if you decide that's the best option for you and the system offers a lot more flexibility.

But with financial change comes the usual horde of scammers. A new report from the Commons' Work and Pensions Committee warns that the pension reforms "have increased the prospect of people being conned out of their life savings". It adds that savers have been endangered by a lack of protection against rip-offs and high fees. The Daily Mail reports that the amount of money lost to pension scams has risen more than fivefold since the pensions freedoms kicked in.

In May 2014, £813,000 was stolen from savers; this May, money lost to pension fraud rose to £4.7m, according to the City of London Police. And before you start thinking "it couldn't be me", don't get cocky the main victims are well-off pensioners with some experience of investing. So how can you avoid falling foul of the fraudsters?

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Firstly, remember that the pension reforms only apply to those over the age of 55. So if someone contacts you about accessing your pension before then, ignore them it is possible legally to access your pension before 55, but it's expensive and unsuitable for most people, so anyone offering you this service out of the blue should be treated with suspicion.

Secondly, this applies to cold calls generally if anyone rings you out of the blue, just hang up.

Thirdly, remember that if it sounds too good to be true, it almost certainly is. Be particularly wary of schemes involving unusual or exotic investments or those promising a temptingly high "guaranteed" income. Finally, if you want to check up on a firm, the financial watchdog, the Financial Conduct Authority, has a warning list. But note that it won't be comprehensive and if you're worried enough to check in the first place, it's probably a scam.