The Salary Calculator

How to navigate pension scams

by Madaline Dunn

Pension scams are on the rise. According to the Financial Conduct Authority (FCA), over £2 million has been lost to pension scammers in the last year, with victims, on average, losing out on £50,949. This number is double what it was in 2020. That said, small pots and big pots are being targeted, with victims being conned out of £1,000 to £500,000.

Of course, it’s incredibly worrying that such a nefarious scam has seen such an increase. Savers work hard their whole lives to make sure that they’re set for their golden days.

In response to this concerning trend, the government recently announced anti-pension scam plans to safeguard savers.

At The Salary Calculator, we’ll walk you through what the government’s Fraud Action Plan is, what it means for you and some steps you can take to protect yourself from pension scams.

This article will explain:

• Latest statistics from the FCA
• What the Fraud Action Plan contains
• Tips to protect yourself against fraud

A warning from the Financial Conduct Authority (FCA)

According to the FCA, pension scams have become increasingly common due to the pension freedoms introduced in 2015. This gave people much more flexibility around their investments; however, this flexibility also brought with it risk.

Now, the FCA says that pension holders were nine times more likely to accept pension advice from someone online than someone in person. Savers were also five times more likely to be attracted to a free online pension review by a stranger than one offered by a stranger in the pub. Worryingly, out of those surveyed, 28% were aware that this kind of offer was typically the sign of a scam.

As a result, Mark Steward, executive director of enforcement and market oversight at the FCA, suggests that pension holders should challenge themselves and “flip the context”. “Imagine a stranger in a pub offering free pension advice and then telling you to put those savings into something they were selling. It is difficult imagining anyone saying yes to that,” he said.

According to Tom Selby, senior analyst at AJ Bell, men aged 55 and over “who can access their retirement pot flexibly” are one of the main targets for this kind of scam. Of course, the current climate caused by Coronavirus has made people more vulnerable to pension scams too.

The Fraud Action Plan

The UK government recently admitted that it needs to do more to protect people from pension scams. So, it will soon publish its Fraud Action Plan 2022-2025, which will seek to bolster consumer protections by eliminating fraudulent infrastructure.

Reportedly, more emphasis will be placed on tackling ‘secondary scammers’ who go after those who have already been scammed, and the government will also pursue greater gathering and sharing of data relating to pension scams.

Tips to protect yourself

While you may think that you’re too savvy to be at risk of a pension scam, scammers are becoming increasingly sophisticated with the tactics they use to trap victims.

The FCA has warned that overconfidence on the part of consumers puts people at risk. So, it’s always best to make sure that you take some steps to safeguard yourself.

Look out for red flags – As outlined above, those offering free reviews are unlikely to be legitimate advisors, equally those who promise you ‘high returns’ are likely to be pulling a fast one.

Keep yourself informed – In line with the UK’s pension rules, you typically can’t unlock your pension until you’re 55. So, if you’re promised an early cash release, it’s likely that this is a scam. Get in touch with the Pensions Advisory Service if you have any questions or concerns. Pension Wise is another service that can help you stay in the loop.

Be wary of cold calls – Back in January 2019, the government banned cold calling regarding pensions. So, unless you have given your pension provider prior permission to call you, ignore calls and texts regarding your pension because those who get in touch are likely to be scammers.

Take your time – Those who pile on the pressure or give you a limited time offer will likely be scammers. It’s important to take the time to research a provider to make sure everything is above board. Always check the Financial Services Register before making a decision.

Tags: 2021, FCA, pension, Pensions, The Salary Calculator

Travel insurance tips this summer

by Madaline Dunn

As the summer goes on and more places open up, the prospect of finally going on holiday is incredibly exciting. That said, with policies around travel changing all the time, it’s also understandable to feel concerned that things might not go according to plan.

At The Salary Calculator, we’ll make sure that you’re all clued up when it comes to travel insurance this summer so that you can take a vacation stress-free.

This article will walk you through:

• What should you look for when choosing travel insurance?
• What situations are not covered by travel insurance?
• What happens if you catch Covid?
• What happens if the NHS app pings you?

What to look for when choosing travel insurance

Luckily, more providers are now offering covid-related travel insurance after initially distancing themselves. Now, there’s a wide range of providers to choose from, but there are a few different aspects to look out for when making your decision.

When searching for travel insurance, ask yourself:

• Does the provider offer coverage if I test positive for Covid?
• Does the provider offer curtailment cover?
• Does the provider offer coverage if I lose a loved one due to Covid?
• Does the provider offer coverage if I miss my flight because my required Covid test has not returned results in time for my getaway?
• Does the provider offer medical cover if I fall ill with Covid?
• Does the provider offer protection from the Foreign, Commonwealth and Development Office (FCDO) travel advice changes?

Equally, to ensure that covid doesn’t catch you out, it’s best to keep updated with any rule changes and travel guidance. So, before booking a holiday, it’s wise to check in with the UK’s traffic light system.

It’s also important to remember that just because a country is on the UK’s green list, you may not be allowed entry as a holidaymaker. Checking the Foreign Office website and checking in with a country’s UK embassy website will keep you in the loop.

When am I not covered?

There are some situations where your travel insurance won’t offer coverage. If the FCDO changes its travel advice to warn against all travel, holiday providers will likely cancel and refund your trip. That said, while policy providers covered cancellation based on FCDO advice before the pandemic, now fewer policy providers are doing so. This will vary depending on your provider, so it’s important to check the details.

Also, be wary of accepting vouchers or Refund Credit Notes (RCN) from airline and holiday companies for cancellations. If you do, you can’t claim from your travel insurance cover as this is viewed as a double claim.

Additionally, you won’t be covered for ‘disinclination to travel’, which essentially means you have personally made the decision not to travel. So, for example, if you’re due to travel but hear that pandemic cases are rising in the area you are staying, you no longer wish to travel and cancel your holiday, you won’t be covered. Equally, if your hotel informs you that some of its facilities will be closed due to Covid, and as a result, you no longer wish to travel and cancel your holiday, you won’t be covered here either.

Am I covered if I catch Covid?

While coverage will vary from provider to provider, there are quite a few out there that offer Coronavirus trip cancellation cover. So, if you or a household member falls ill with Covid within 14 days of your holiday, and you have to cancel, you will be covered.

Some providers offering this coverage include:

• Co-op
• Asda
• Nationwide
• JustTravelCover
• Staysure

Likewise, if you have booked activities for when you are on holiday, and they are disrupted due to Covid, there is Coronavirus excursions cancellation coverage.

What happens if I’m pinged

Recently, more and more people are being ‘pinged’ by the NHS app. So much so, the phenomenon has been dubbed the ‘Pingdemic,’ with record numbers reaching 689,313 in one day at the end of July.

So, it’s understandable to be concerned that your holiday may be jeopardised by coming into contact with someone who has tested positive for the virus.

If you do find yourself pinged before you set out on holiday, you should identify whether or not the Test and Trace service is instructing you to isolate. While you do not legally have to isolate yourself if you have not received instruction, it is advised to do so. Subsequently, most providers will offer cover for ‘advised’ isolation. Staysure, for example, offers cancellation cover if you are unable to travel due to receiving contact from Test and Trace.

Tags: holiday, Travel, Travel insurance