Scammers have various ways of getting you to depart with your pension, and once you make that transfer, your retirement money is gone. Scammers can be very hard to spot; they know exactly what they’re doing. Let’s explore how you can protect your pension and reduce your risk of falling victim to these scams…
Warning Signs
- Cold calling- since January 2019, there has been a ban on cold calling about pensions. Unless you’ve asked a company to contact you about your pension, they are not allowed to. So, if someone tries to get into contact with you out of nowhere regarding your pension, steer clear!
- Claiming to know ways of avoiding tax or saving on tax- yes, tax can be frustrating, but it is there for a reason. We are sorry to say that there’s no loopholes here!
- Promising limited time offers or one-off investments- if it sounds too good to be true, it probably is
- Offering a loan or cash back from your pension- don’t be tempted by the promise of cold hard cash. It’s false
- Rushing you to make decisions- take a step back and question why you are being rushed. If they are legitimate, why would you need to make a decision so quickly about money you’ve been putting away for decades?
- Getting you to download software or apps- scammers may do this to gain remote access to your devices in order to access things like your bank details
- Free pension reviews- as one of the most popular pension scams, this sounds harmless but it won’t end up being just a review at all
- Claiming to help you access your pension before age 55- you cannot do this without ending up with a very high tax bill from HMRC
- Offering complicated investment schemes- a good rule to follow is that if you don’t understand it, don’t do it
- Putting your money into a long-term investment- scammers may use this tactic as you wouldn’t necessarily notice for years that there is something not right
- Suggesting you funnel all of your pension pot into a singular investment- the investments most scammers persuade you to buy into are incredibly high-risk, meaning you risk losing all of your retirement savings. Most regulated financial advisers will suggest diversifying your investments to reduce risk
Protecting your Pension
- Many pension scammers have convincing websites and online presences to make them seem like they’re legitimate. This is why it’s so important to take extra precautions with your pension.
- Check the FCA register to check if they’re legitimate
- Check the FCA’s list of unauthorised firms and individuals
- Check the FCA Warning List to see the risks associated with a potential investment
- Talk to a regulated financial adviser before transferring your pension
- Check it isn’t a clone firm. Some scammers pose as legitimate firms by using their name but different contact details. Make sure you use the contact details which are on the FCA website to ensure you don’t fall into this trap
- If you think you’ve been scammed, contact your pension provider to see if they can stop the transfer if it hasn’t taken place yet
Your pension pot is made up of your hard-earned money, so why risk losing it all? Take these precautions and watch out for scammers! If you have been a victim of a pension scam, contact Action Fraud to report it.