Pension Scams

If you are under 55 you normally can’t legally access the money in your pension scheme. There are only rare cases where it’s possible to do this, such as if you’re in very poor health.

Once you reach the age of 55 you can consider accessing your personal pension and this is what fraudsters are after!

There are different types of pension scam but they can all lead to you losing a lifetime’s worth of savings in a moment.

Since April 2015 you have more choices about how you can access your pension pot than in the past. Be on high alert. Fraudsters are likely to take advantage of these new rules by trying to persuade people to cash in their pension - either the whole lot or a large sum - and hand the money to them to invest. Watch out particularly for people contacting you out of the blue or adverts claiming to offer free pension reviews or no-obligation consultations.

What to do if you think you’re being targeted

  • Never be rushed into making a decision. Before you sign anything, contact the Pensions Advisory Service (TPAS) on 0300 123 1047.
  • Make sure the firm is registered with the Financial Conduct Authority (FCA) to conduct business before you agree to anything. Use the FCA’s online firm or call 0800 111 6768.
  • Look at the FCA’s Scamsmart warning list – this will tell you the names of known investment scheme scams.
  • If you have accepted an offer or think you’ve detected a scam, raise the alarm by calling Action Fraud on 0300 123 2040.
  • It is important to check the facts before you make any irreversible decision. Remember you could lose your lifetime’s savings.

Some of the most common tactics used by scammers to trick you out of your savings are:

  • Cold call, text message, website, pop up or someone coming to your door offering a ‘free’ pension review
  • Convincing marketing materials that promise you returns of over 8% on your investment
  • Paperwork delivered to your door by courier, that requires immediate signature
  • A proposal to put your money in a single investment. In most circumstances, financial advisers will suggest diversification of assets

Scammers don’t care whether you’re an inexperienced investor or have never put your money anywhere other than a bank. They will try to flatter, tempt and pressure you into transferring your pension fund into an investment with attractive sounding returns. Once you’ve signed the forms and the transfer has gone through, it’s too late. You’ll probably lose all your savings and end up with nothing but a hefty tax bill. Remember, the only people who benefit from scams are the scammers themselves.

How do I avoid being scammed?

  • Never give out financial or personal information to a cold caller
  • Check the credentials of the company and any advisers – who should be registered with the Financial Conduct Authority
  • Ask for a statement showing how your pension will be paid at retirement, and question who will look after your money until then
  • Speak to an adviser that is not associated with the deal you’ve been offered, for unbiased advice
  • Never be rushed into agreeing to a pension transfer.