Avoiding scams

What is a scam?

Sadly, fraud across financial services is all too common – and pensions are no exception. No one likes to think they’ll be caught out by a scam, but it happens more than you’d think.

Scammers tend to contact people out of the blue, trying to persuade them to transfer their entire pension, or at least part of it. The promises scammers make sound tempting at face value and can range from unlocking pension benefits to earning attractive rates of return.

The common theme with all scams is that they will cost you money - sometimes even your entire pension savings.


How pension scammers operate

Even though it is illegal to ‘cold call’ about pensions, it still happens. So, think twice if you get a call, email, letter, text or any other communication about your pension that isn’t from your pension provider. Typical scams offer a free review, ‘liberation’ of your pension (often before you can legally take it) or attractive rates of return to transfer your pension elsewhere.

Other things to look out for include:

  • Offers of ‘free’ pension advice
  • Rushing you into a decision or proposing a ‘time-limited’ offer
  • Offering early access to your pension (offers to release money before 55 are very likely to be a scam)
  • Offers to ‘cash in’ your pension or promising a larger lump sum than the 25% currently available tax free  
  • Unusual, high risk investments or investments with an abnormally high rate of return
  • Persistent calls, exclusive offers and one-time only opportunities

 

How to protect yourself

  • Don’t be pressured into making a quick decision. Reputable firms give you the time you need to decide and to complete background checks on them.
  • Check that the person or company you are dealing with is registered with the FCA. You can check the FCA Register to make sure they are authorised. You can also call the FCA on 0800 111 6768 to check they are permitted to give pension advice. https://register.fca.org.uk/s/
  • Make sure they aren’t a clone of a genuine company. Always use the contact details on the FCA Register and don’t be afraid to ask lots of questions.
  • If you are promised you can release pension funds before age 55, it’s almost certainly a scam. While you may receive some money (less a fee) you could be left with a tax bill of up to 55% on the money withdrawn.
  • Reject cold calls or unsolicited offers. Professional advice is never free and it is illegal to cold call about your pension.
  • Finally – if it sounds too be true then it usually is. Walk away, even if this means you ‘miss out’ on what appears to be a great deal.

 

Further information on scams

FCA Pension scams | FCA

Moneyhelper - Types of scam | MoneyHelper

Age UK - Scams advice – How to spot and avoid scams | Age UK


If you think you have been scammed

If you think you are being, or have been scammed, call us immediately on [insert XPS number].

You should also report the scam to Action Fraud on 0300 123 2040 or at www.actionfraud.police.uk